In what Gov. Jack Markell called “a win for Delaware,” DuPont Co. and Dow Chemical Co. said Friday that they have picked DuPont’s office complex outside Wilmington as the headquarters for top officials of their planned new combined pesticide and seed company, which will bear the DuPont name.
Delaware promised income-tax rebates for workers earning above $70,000 a year, $6 million in construction capital expenditure grants, and $3.6 million “to support employment” to keep the headquarters, state officials said in a statement.
The state also agreed to increase its research tax breaks, dropping a $5 million yearly cap and offering to give the new company money to support R&D even in years in which it has no income to tax, in hopes of reversing DuPont’s recent decisions to reduce farm-product research in Delaware and move it closer to farmers in the Midwest.
Last year, Dow earned $4 billion and DuPont earned $2.4 billion in after-tax profits.
In Iowa, state and local governments gave $17.2 million in incentives to keep DuPont Pioneer and 2,600 crop seed jobs in Johnston, though the state was rebuffed in its effort to win the corporate headquarters, the Des Moines Register reported.
Indianapolis also had hoped to convince the companies to locate the corporate headquarters at Dow’s pesticide unit there.
Under pressure from hedge-fund investors disappointed by years of low profits from research investments, DuPont and Dow have cut jobs recently, and are planning more layoffs in advance of their proposed merger later this year.
The DuPont-branded agricultural combination is one of three companies Dow and DuPont hope to spin off in the next few years after their proposed merger.
The largest of the three will be a Dow-branded materials company, including Dow’s existing businesses, minus pesticides and seeds, plus DuPont Performance Materials. That company will based at Dow’s current headquarters in Midland, Mich.
A third “Specialty Products” company will combine DuPont’s electronics, nutrition, industrial biosciences, and safety (Protective Solutions) products, and will also include Dow Electronics and its Newark, Del., plant. Like the farm company, it will be based in Wilmington, about 25 miles southwest of Philadelphia.