Dow and DuPont Confirm Merger | Chemical & Engineering News
Latest News
Web Date: December 11, 2015

Dow and DuPont Confirm Merger

Combination to include the Dow Corning silicones joint venture
Department: Business
Keywords: Dow, DuPont, merger , activist investors
[+]Enlarge
Liveris.
Credit: Jonathan Ernst/Reuters/Newscom
Photo of Andrew N. Liveris
 
Liveris.
Credit: Jonathan Ernst/Reuters/Newscom
[+]Enlarge
Breen.
Credit: DuPont
Photo of Edward D. “Ed” Breen
 
Breen.
Credit: DuPont

In a stunning series of announcements this morning, Dow Chemical and DuPont confirmed earlier rumors that they will merge into a chemical giant valued at $130 billion. The new company will be short lived, however, as it plans to break up into three specialized companies—in agriculture, materials science, and specialty products—within 18–24 months of the closure of the deal.

Not anticipated by the earlier reports is a concurrent plan for Dow to buy out Corning in their Dow Corning silicones joint venture. The Hemlock Semiconductor polysilicon venture will remain owned by Dow and Corning. Separately, DuPont announced a $700 million cost-cutting effort that will eliminate about 10% of its workforce.

Dow and DuPont anticipate realizing $3 billion in cost savings and about $1 billion in what it calls growth synergies. Further job cuts will undoubtedly play a role in the savings effort.

Together, the actions will radically remake two of the stalwarts of the global chemical industry. The moves could spur further industry restructuring, particularly in agricultural chemicals, where other companies may be compelled to respond with mergers of their own.

Click here for C&EN’s earlier story on the rumored deal. C&EN will post a more detailed story after a conference call this morning involving the CEOs of Dow and DuPont.

 
Chemical & Engineering News
ISSN 0009-2347
Copyright © American Chemical Society
Comments
David Uhrick (December 15, 2015 4:42 PM)
Yes, of course, any merger of two large companies in similar market areas allows for potential cost savings by elimination of resulting redundant employment -- particularly in middle management. However, the threat of a 10% reduction in total staff sounds an ominous tone for all present employees there.

As the victim of such a 10% staff reduction at one (non-merging) company very early (1969) in my chemical career, I can attest to the demoralizing effect on all employees during the period of uncertainty of knowing which ones were being laid off.
This potentially throws a significant number of newly-unemployed chemists into the job market at one time.

In my case, I am happy to report that the American Chemical Society picked up the slack for the remainder of my career.

Leave A Comment

*Required to comment