Dow Chemical CEO plans retirement and handover in 2017
By Joshua Schneyer and Swetha Gopinath
(Reuters) - Dow Chemical’s (DOW.N: Quote) chief executive Andrew Liveris, fresh from orchestrating a $130 billion merger with U.S. rival DuPont, on Tuesday announced plans to retire by mid-2017, a step he takes after years of pitched battles with an activist shareholder unhappy with his leadership.
On a quarterly earnings call with analysts, Liveris said he would step aside by the second half of next year. The news represents a victory for Daniel Loeb, the head of New York hedge fund Third Point. The fund has a 2 percent stake in Dow and Loeb has been questioning Dow’s leadership since 2014, amid slumping share prices.
A 40-year veteran of Dow, Liveris has been CEO of the Midland, Michigan-based company since 2004. Over that period, the Australian engineer has become one of the world’s best known CEOs, delivering keynotes at the Davos World Economic Forum, and serving on an advisory panel to U.S. President Barack Obama.
On Tuesday, Liveris suggested that he will stick around long enough to see through Dow’s merger with DuPont, which envisages combining the storied U.S. chemicals companies and then splitting them into three separate businesses. If the plan succeeds, the firms that emerge will be global powerhouses in the plastics, specialty chemicals and agricultural seeds industries.
Liveris will leave “when we are set up to be spun off, but no later than the end of Q2 2017.”
When the merger was announced on Dec. 11, the companies said that Liveris planned to take on the role of executive chairman of the combined firm, while DuPont’s CEO Edward Breen would become CEO. Although Liveris could still be executive chairman for a short time, his plans to depart quickly took some on Wall Street by surprise.
The announcement may have helped boost Dow’s share price on Tuesday, when it rose by 5.8 percent to $45.03, a three week high. It came after Dow also reported quarterly earnings that beat Wall Street’s expectations.
“Investors now have some certainty about when Mr. Liveris will be stepping down,” said Arun Viswanathan, an analyst at RBC Capital Markets in New York. “That was likely a factor in today’s stock performance. There had been uncertainty about what future role he might play once the merger is complete.” Continued...