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CEO Daily: Wednesday, December 9

Unless you are an investment banker, it’s hard to feel good about the deal to merge Dow and DuPont, two storied American science companies with 330 years of history between them. The plan is to combine the two $60 billion companies and then break them apart again, creating three more “focused” companies in agriculture, materials science and specialty products.

My Fortune colleague Stephen Gandel says the deal “is about a slow-paced economy and fast-paced investors.” DuPont was hounded by activist Nelson Peltz, whose bid for influence was defeated by CEO Ellen Kullman. But he held his shares and she lost her job. Dow’s Andrew Liveris has fared better, but he has activist Daniel Loeb nipping at his heels. Perhaps shareholders will make money from this massive act of corporate engineering – both stocks rose modestly after the announcement - but the end result is sure to be fewer employees and shrinking research budgets. Pardon me for sounding Trumpian, but it’s hard to believe the folks at Sinochem aren’t cheering.

My friend Dennis Berman at The Wall Street Journal calls the merger/breakup “The Shrinking of American Ambition.” (subscription required.) At BreakingViews, Kevin Allison says it will be this generation’s “Barbarians at the Gates.”

As mentioned yesterday, U.S. antitrust cops are feeling their oats these days, and may try to axe this deal. But that won’t solve the basic problem: old-line American companies are facing demands from yield-starved investors which they can’t satisfy with organic growth.

Before descending too deep into declinism, however, it’s good to remember there’s always Silicon Valley. I met yesterday with Scott Dietzen of Pure Storage, whose company makes the flash storage that is helping to power the corporate data revolution and recently reported sales growth of over 167% a year.

Dietzen took Pure Storage public last year, and is happy about it. “We believe in the public company model,” he says. “Most of our customers are public companies.” And he believes his company has a huge (oops, hearing Trump again) opportunity in the tech transformation of business, which he believes is just beginning.

“We are in the first inning of taking the learnings from the Google, Facebook and Apple era in the consumer market and applying those learnings to enterprise tech,” Dietzen told me.

So the revolution stumbles on. More news below.

Alan Murray
@alansmurray
alan.murray@fortune.com

Top News

Chipotle plays the blame game

Chipotle Mexican Grill's shares have fallen nearly 30% since the company first acknowledged an E. coli outbreak in October at some of its Oregon and Washington stores. Sales have faced pressure since then, as additional cases and updates to the story since October have led to weaker demand. Chief Financial Officer Jack Hartung placed the blame on two culprits: the government and the media. He contends that U.S. Centers for Disease Control and Protection’s various updates to the case – which Hartung described as "unorthodox" – had prompted the media to fan the hysteria. Fortune

North Face founder dies in accident

Douglas Tompkins, the founder of outdoor clothing and equipment company, died on Tuesday during a kayaking trip in Chile when his boat flipped and he fell into icy waters. He was 72. Tompkins founded The North Face, now part of VF Corporation, in the 1960s as a small ski and backpacking retailer in San Francisco. It later expanded to sell goods to other outdoor enthusiasts. Tompkins was also known as an environmentalist – he acquired vast tracts of land in Chile and Argentina which were converted into protected nature parks. Reuters

AB InBev CEO defends deal

Anheuser-Busch InBev Chief Executive Carlos Brito sought to assuage concerns that a "Mega Beer" merger in the global market would not hurt the vibrancy of smaller craft beers, battling against accusations from insiders that another big acquisition would be bad for consumers. Brito defended the deal at a hearing held by the U.S. Senate's subcommittee on antitrust, where much of the focus was on maintaining the integrity of the distribution of beers so smaller brands could effectively compete. Senators spent their time also touting the success of the craft beer movement in their local states. Fortune

Anglo American to cut 85,000 jobs

Anglo American said it will trim the mining firm's workforce by nearly two-thirds – a reduction from 135,000 to 50,000 – as the company must restructure in the face of collapsing prices that have battered profits. Anglo also announced it will suspend dividend payments for a year and consolidate from six to three businesses. Mining companies across the globe have been profits and commodity prices greatly pressured as demand from China has slowed. BBC

Around the Water Cooler

How oil's plunge has hurt stocks

Investors in the S&P 500 have lost a collective $703 billion in energy company stocks since June 2014, according to Standard & Poors, back when oil prices peaked most recently at $105 a barrel. On Tuesday, oil prices hit a seven-year low of $37 a barrel. The energy sector is by far the biggest money loser of all sectors in the S&P 500. More troublesome, the declines have accelerated recently due to fears of a further slowdown in China and an oversupply of oil. Fortune

How Pfizer sets lofty drug prices

The Wall Street Journal looks at Pfizer as a case study into the broader question about drug prices: what are the factors that go into setting a price, especially for costly to develop, rare treatments? It looks at Pfizer's new breast-cancer drug called Ibrance. Days before it was to set the price, Pfizer learned a competitor raised the monthly cost of a rival treatment by nearly a thousand dollars. At that point, Pfizer was left wondering if its list price of $9,850 a month for the pills was too low. A Senate committee hearing is being held on Wednesday to look into drug pricing, focusing on sudden large increases that occur when firms purchase the rights to drugs developed by others. Wall Street Journal (subscription required)

5 things to know today

Yuan Direction and Drug Price Hearing--5 Things to Know Today. Today's story can be found here.

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