9. On September 1, 2017, DowDuPont announced the successful merger of equals between Dow Chemicals (DOW) and DuPont (DD) in a stock-for- stock transaction effective August 31, 2017. Under the terms of the agreement, DuPont shareholders would receive 1.282 shares of DowDuPont for each of the 533 million shares outstanding. Each Dow shareholder would retain their shares which were 745 million outstanding. On Wednesday, August 30, the last day of trading before the announcement, Dow shares closed at $64.90, while DuPont shares closed at $83.19. a. Compute the percentage Ownership for shareholders of each company once the deal is closed. b. What is the total number of shares in DowDuPont? c. Assuming that DuPont shareholders are the target, what acquisition premium per share and in total did they receive from the deal? d. Assuming zero synergy in the deal, what is the wealth transfer, if any, from Dow shareholders to DuPont Shareholders? Merger Calculations (Amounts in Millions) DuPont Shareholders Ratio Shares Outstanding Shares Ratain by Dow Dow Shares Closed on August 30th. DuPont Shares Closed on August 30th. A. Compute the percentage Ownership for shareholders of each company once the deal is closed. DowDuPont Shares Total Shares DownDupont Shares Dow Ownership Percentage DuPont Ownership Percentage B. What is the total number of shares in DowDuPont? Total Shares DownDupont Premerger Share Price of Dupont Post Merger Share Price of DownDuPont Premium per Share Number of Shares Pre-Merger Total Received from the Merger c. Assuming that DuPont shareholders are the target, what acquisition premium per share and in total did they receive from the deal? $ Position Dow Shareholders Value DowDuPont Company Wealth After Merger Dow Wealth Pre-Merger Dow Difference in Wealth $ ssssssss 1.282 533.00 745.00 $64.90 $83.19 D. Assuming zero synergy in the deal, what is the wealth transfer, if any, from Dow shareholders to DuPont Shareholders? $ 683.31 1,428.31 52.16% 47.84% $ $ 1,428.31 $83.19 $83.20 $0.0118 533.00 6.29 52.16% 92,697.06 48,350.50 48,350.50 Therefore, is no weatlh transfer from Down to DuPont shareholders 10. Assume that Dow Chemicals as the acquirer in question 9 agreed to pay 30% of the consideration in cash. a. What is the new exchange ratio for the cash-and stock deal? b. What are the values of the cash component and the stock component of the nominal price per share? C. How much is paid in cash to DuPont shareholders? d. What is the wealth transfer from Dow shareholders to DuPont shareholders? e. What is the Downside Protection for the Target shareholders?