Dow Chemical CEO Liveris to step down by mid-2017

By Swetha Gopinath and Amrutha Gayathri
A sign is seen at an entrance to a Dow Chemical Co plant in Plaquemine, Louisiana December 12, 2015. REUTERS/Jonathan Bachman

By Swetha Gopinath and Amrutha Gayathri

(Reuters) - Dow Chemical Co Chief Executive Andrew Liveris said he would leave the company by mid-2017 after it merges with fellow chemical and seeds producer DuPont .

DuPont CEO Edward Breen will head the combined company after the merger, while Liveris, 61, is set to be executive chairman. The deal is expected to close in the second half of 2016.

"... My own planned transition out of the company, which will occur when we are set up to be spun off, but no later than the end of Q2 2017," Liveris said on a call with analysts after Dow reported a better-than-expected quarterly profit.

DuPont and Dow will combine and then split into three separate businesses, focused on material sciences, specialty products and agriculture.

Activist investor Daniel Loeb of hedge fund Third Point has been agitating for the removal of Liveris from the merged company, alleging that he failed to unlock value for Dow shareholders during his time as CEO.

Liveris's departure would end a four-decade career at Dow during which the Australian engineer became one of the best known executives in the world. However, his spending of company money on non-business items has come under scrutiny.

Reuters reported last year that internal auditors at Dow had questioned Liveris's spending for years. Dow says those issues were resolved long ago.

Reuters also reported in June that the Securities and Exchange Commission was investigating Dow, and was looking into the spending issues raised by former auditors there.

Dow named James Fitterling president on Tuesday. Fitterling, who will continue as COO, will report to Liveris.

The company is targeting an additional $300 million in cost savings in 2016, building on the $345 million it realized last year, CFO Howard Ungerleider said on the call.

DuPont, which plans to cut 10 percent of its workforce of about 54,000, unveiled a new cost-cutting target last Tuesday.

Dow will cut 500 more jobs, taking its total workforce reduction to 2,200, Liveris said, adding that the company has laid off 1,200 employees so far. Dow employed 49,500 people worldwide in 2015.

Lower costs boosted Dow's operating margin by 406 basis points to 20.9 percent in the three months ended Dec. 31.

Adjusted profit of 93 cents per share handily beat the average analyst estimate of 70 cents, according to Thomson Reuters I/B/E/S.

Dow shares were up 4.4 percent at $44.45 at midday on the New York Stock Exchange.

(Additional reporting by Joshua Schneyer; Editing by Anil D'Silva)