Dow Chemical Co. (DOW) and Third Point LLC announced a truce Friday, with the chemicals giant adding four new independent directors to its board and the activist fund agreeing to a one-year standstill.
Midland, Mich.-based Dow said that Robert S. Miller, chairman of American International Group Inc. (AIG) , US Bancorp (USB) CEO Richard Davis, one-time Foster Wheeler AG (FWLT) CEO Raymond J. Milchovich and former IBM Co. (IBM) chief financial officer Mark Loughridge will join its board in 2015.
Third Point will vote in favor of the company's nominees, and pledged to withhold further criticism of Dow for one year. Milchovich and Miller were both on an unofficial advisory board Third Point created to advise the company.
The agreement follows an increasingly heated dispute between the company and its shareholder, culminating with Third Point last week launching a web site critical of Dow's plans. The site appeared to have been taken down on Friday morning.
Dow has been involved in an ongoing transformation that began in 2008 when it purchased Rohm and Haas Co. for $18.8 billion. The company in the years since has divested numerous assets and reworked joint ventures, pledging earlier this month to sell a total of $8.5 billion in assets and repurchase upwards of $14.5 billion in shares.
Third Point, led by CEO Daniel Loeb, has pushed the company to go further and explore separating its commodity chemical operations from its specialty products business.
A chemicals source said the agreement between Dow and Third Point likely also envisions Dow eventually replacing CEO Andrew Liveris, the architect of the company's many moves over the last decade and a target of criticism from the activist.
Dow and Third Point in a statement said they "both are pleased to have resolved the matter amicably and to have arrived at an agreeable path forward," saying neither side will make any further public comment.