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Businesses The Almighty Buck

Dow Chemical and DuPont Plan Huge Merger Followed By a Split (nytimes.com) 56

An anonymous reader writes: Two of the largest and oldest chemical companies, Dow and DuPont, have planned a merger. Dow's 53,000 employees will join forces with DuPont's 63,000 employees, which will challenge Germany's BASF for the biggest chemical company in the world. Not for long, though — once the merger is complete, they will split up into three. One will focus on agriculture, one on materials science, and one on specialty products. According to the press release, it will indeed be a merger of equals, with both companies comprising 50% of the new DowDuPont behemoth. "Despite the eventual breakup, the deal would undergo rigorous antitrust scrutiny for all three companies, particularly the agricultural chemicals company. Still, the companies did not expect that the deal would require much in the way of other divestitures to satisfy regulators' concerns."
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Dow Chemical and DuPont Plan Huge Merger Followed By a Split

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  • by Anonymous Coward
    Between me, my father, and my brother, we own over $100k in stock in these two companies.
    • by ls671 ( 1122017 )

      Well. at least I don't think they have tried to produce reel to reel tape like BASF has done. Damn I used to hate those BASF tapes that left their coating and what not on my recording heads. Back then I would swear by 3M Scotch Classic.

      • Well. at least I don't think they have tried to produce reel to reel tape like BASF has done. Damn I used to hate those BASF tapes that left their coating and what not on my recording heads. Back then I would swear by 3M Scotch Classic.

        i used to buy BASF cassettes in the belief that they knew what they were doing, and in the fullness of time they all refused to move. Tried transferring the tape packs into new housings, no go, so I figure the lube in the tape went away.

  • I worked as a network engineer/contractor near 2001 for Dow when they were merging with Cargill - trying to mix an OSPF and ISIS network and they ran DecNet - good times

    • by dwywit ( 1109409 )

      DecNet - shudder, twitch. A trigger warning would have been nice. Now I need to go to my safe space.

  • by Anonymous Coward

    10% of the total staff will face the axe as well..

    Of course execs and shareholders will make out like bandits. Or would that be "robber barons"?

    • Teddy would be turning over in his grave...

    • and they will say we need more HB1's as we can't find some in the usa to work our help desk for $12 HR.

      • You know, they could hire some H1B1's to replace the expensive CEOs that are getting $70 million golden parachutes. I bet an Indian CEO would do just as good if not better and do it all for a $70,000 golden parachute.
    • 10% of the total staff will face the axe as well..

      That's why they call it synergy.

    • Of course execs and shareholders will make out like bandits.

      So then invest in the stock. Quit whining and complaining about the success of others, and start trying to get rich yourself.

      • News that is known is already built into the price. Unless you bought Dow or DuPont a couple months ago and the market thought the merger was worthwhile (not usually for the reasons put out in the press release), you're not going to be making bank. Right now, no pop in the stock price means that no one's making money from the merger except the investment bankers that will be involved in the stock conversions.

  • by nitehawk214 ( 222219 ) on Friday December 11, 2015 @05:54PM (#51102629)

    Once they spit the new companies will be named Dow Du and Pont.

    • Re: (Score:2, Funny)

      by Anonymous Coward

      Du...
      Du Pont...
      Du Pont mich.

      Sorry, that thought was marching in a circle through my brain until I posted this and let it out. Now, it's in your brain!

  • by erice ( 13380 ) on Friday December 11, 2015 @05:58PM (#51102649) Homepage

    Once the two are combined, they plan to split into three separate companies, consisting of agricultural chemicals, specialty products and materials, like plastics.
    Despite the eventual breakup, the deal would undergo rigorous antitrust scrutiny for all three companies, particularly the agricultural chemicals company. Still, the companies did not expect that the deal would require much in the way of other divestitures to satisfy regulators’ concerns.

    So, they plan to combine two competing companies into one and then divide into three non-competing companies and they expect this to satisfy regulators? Are the regulators that corrupt?

    • Are the regulators that corrupt?

      Kind of a silly question, no?

    • by rsilvergun ( 571051 ) on Friday December 11, 2015 @06:01PM (#51102665)
      we've been either stacking our regulatory bodies with captured folks or just plain not funding regulation for decades. We don't like small, local corruption (like being shaken down for money by cops or having your mail stolen) but we ignore big stuff like this. When I point it out to people they just don't believe it's real. I get the same when I point out that the Safety Net was dismantled in the 90s... :(
    • by MightyMartian ( 840721 ) on Friday December 11, 2015 @06:01PM (#51102669) Journal

      So, they plan to combine two competing companies into one and then divide into three non-competing companies and they expect this to satisfy regulators? Are the regulators that corrupt?

      That's a rhetorical question, right?

    • by bws111 ( 1216812 )

      Why would the three companies have to compete with each other? There are other very large companies in those businesses.

    • by Anonymous Coward

      Once the two are combined, they plan to split into three separate companies, consisting of agricultural chemicals, specialty products and materials, like plastics.
      Despite the eventual breakup, the deal would undergo rigorous antitrust scrutiny for all three companies, particularly the agricultural chemicals company. Still, the companies did not expect that the deal would require much in the way of other divestitures to satisfy regulators’ concerns.

      So, they plan to combine two competing companies into one and then divide into three non-competing companies and they expect this to satisfy regulators? Are the regulators that corrupt?

      "Despite the eventual breakup, the deal would undergo rigorous antitrust scrutiny..."

    • by thegarbz ( 1787294 ) on Friday December 11, 2015 @06:21PM (#51102781)

      Are the regulators that corrupt?

      Regulators don't exist to prevent companies from getting big, they exist to prevent companies from anti-competitive practices. That is very much up to general market conditions, market power and the actions of a company. All of this is helped by the fact that their competitor after the merger-split will still be larger than they are.

      So while yes, regulators are likely corrupt just like a politician is likely lying somewhere in the world right now, it doesn't actually have much to do with the situation at hand.

      • Except that the plan is very similar to that of gerrymandering and telecom companies' regional "gentleman's agreements". Before the merger, there are two companies whose products overlap and therefore are currently in competition. After the merger there will be three companies whose products don't overlap, reducing competition in each of their product areas.

        • by khallow ( 566160 )
          It's also very similar to splitting up businesses much smaller than the current merger. You need a better argument here.

          My view is that huge businesses are directly a result of onerous regulation. The largest businesses have the economies of scale to deal with the overhead of regulation and the resulting corruption of regulators.

          Want a competitive marketplace? Make it possible for small and medium scale businesses to thrive.
    • Are the regulators that corrupt?

      Absolutely. I expect this to sail through unless it rustles the jimmies of some other large corporation.

    • by Anonymous Coward

      China, and the Arab nations, are in the process of building up their chemical industries. So, the two big american chemical companies will merge to keep up.

    • So do you have a solution for the problems that will precipitate from this mixture? Or just a reaction? Perhaps you are just afraid that when these major elements of the chemical industry are compounded, that it will catalyze a reduction of competition?

  • by NotInHere ( 3654617 ) on Friday December 11, 2015 @06:06PM (#51102707)

    Always has been the job of chemical companies, and always will be.

  • and even better stock options.
  • by cfalcon ( 779563 ) on Friday December 11, 2015 @07:44PM (#51103115)

    The standard model does predict that a Dow/Dupont merged particle could exist, but it would have a very short half life, and will be observed by the three predicted decay companies.

  • To me it sounds like there is some hostile activity happening to at least one of the two. So they are going into survival mode. Watch as the axe starts to fall on North American wages and salaries. Watch like a hawk for equipment and whole factories secretly being loaded on ships to go to places where environmental law is non existent and labour is dirt cheap. Trust, integrity, company values have all become smoke and mirrors in our new Warlmart Nation world!
    • by ember42 ( 202034 )

      At least for the materials (read plastics) company I don't expect much closures in NA. Natural gas is cheap in NA, and expensive elsewhere. Feedstock costs are far higher than labour in chemical plants. The agri-chem company on the other hand...

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