Dow Chemical and DuPont announced Friday morning that Wilmington, Delaware, will be the headquarters for their combined agricultural business, but that Indianapolis will be one of its “global business centers.” It wasn’t immediately clear how that designation would affect employment at the Indianapolis headquarters of Dow AgroSciences, Dow Chemical’s ag division, which employs 1,500, many of them highly paid executives and researchers. However, the Indiana Economic Development Corp. said in a written statement that “with the establishment of this global business center, long-term revenue and commensurate employment are expected to grow in Indianapolis.”



Dow and DuPont said Wilmington will be home base for the CEO and “key corporate support functions” while Indianapolis and the other global business center—Johnston, Iowa—will be home to the leaders of business lines, R&D, the global supply chain, sales and marketing.

“Indiana will have a major presence in the new company, and we’re thrilled, because no presence was one of the early options,” Ted McKinney, director of the Indiana Department of Agriculture, told IBJ.

He said Dow and DuPont were attracted to Indiana for Dow Agro's facilities and talent, Indianapolis International Airport, the “very strong presence” of Purdue University’s agricultural program, and the overall business climate. Economic development officials in states across the country have been frenetically negotiating with Midland, Michigan-based Dow and Wilmington, Delaware-based DuPont since the companies on Dec. 11 announced a historic merger of equals. Their merger is the first step in a plan to break apart into three publicly traded businesses, one of them focused on agricultural products, including herbicides and genetically modified seeds. That new, as-yet-unnamed business will be largest global player in crop protection and seeds.



Business observers had speculated it would be an Business observers had speculated it would be an uphill battle for Indianapolis to land the headquarters because DuPont’s ag business is significantly larger than Dow’s. The headquarters of DuPont’s Pioneer ag business is in the Des Moines, Iowa, suburb of Johnston.



Gov. Mike Pence called the announcement good news, saying in a statement that "Hoosiers can be assured our state will continue to play a leading role in the future of this exciting new company."

The IEDC said in a statement that “as a result of the state’s and city’s negotiations with the two companies’ leadership teams over the past several weeks, along with support from Indiana’s congressional delegation, a significant portion of the agriculture company will be based in Indiana.”



Dow AgroSciences CEO Tim Hassinger said Indianapolis' designation as a global business center ensures that the new company “maintains a strong focus on agricultural R&D innovation in Indiana and near our customers.” Dow AgroSciences CEO Tim Hassinger said Indianapolis' designation as a global business center ensures that the new company “maintains a strong focus on agricultural R&D innovation in Indiana and near our customers.” DuPont’s ag business has about $11 billion in annual sales and employs 12,000 workers, while Dow Agro has $7 billion in sales and employs about 9,000.



Dow and DuPont officials said in December they plan to squeeze out $1.3 billion in cost savings from merging the ag units, but they have not estimated how many layoffs will occur.



“We will gain significant synergies through seed production cost efficiencies by maximizing the R&D programs of the two companies and through the optimization of our production and supply chains,” DuPont CEO Ed Breen, who will become CEO of the combined DowDuPont, said on the day the merger was announced.



Indianapolis Mayor Joe Hogsett said in a statement that he is “optimistic about the further growth of DowDuPont in our community. We look forward to ongoing conversations with their management team, and will be aggressive in our efforts to attract even more jobs to Indianapolis.”

The Indiana Department of Agriculture's McKinney declined to offer specifics on incentives offered by the state or city, saying negotiations are continuing.

“The city and the state have been very aggressive with incentives, and they will be performance-based,” he said.



McKinney said controversy surrounding the Religious Freedom Restoration Act did not enter into the negotiations and "never came up." Dow and DuPont are strong corporate advocates for gay rights

The companies plan to complete their merger in the second half of this year. They expect to separate the ag business into a public company about two years later.