Dow Chemical Co. and DuPont Co. are in advanced talks to merge, in what would be a combination of two of America’s oldest companies that together are worth nearly $120 billion.
The chemical giants, which each have a market capitalization of about $60 billion, could announce a merger in coming days, people familiar with the matter said. It would be followed by a three-way breakup of the combined company, they said, a common approach to mergers and acquisitions of late. Dow’s Chief Executive Andrew Liveris is expected to be executive chairman of the new company, with DuPont CEO Edward Breen keeping that title.
Terms of the deal couldn’t be learned, but some of the people said it would be billed as a merger of equals, meaning there wouldn’t be a big premium for either set of shareholders. A deal hasn’t yet been inked and the talks could fall apart, the people cautioned.
Even if the two sides manage to agree, there is no guarantee antitrust regulators would bless the union or that the breakup plan would address any such concerns. The merger would combine two top suppliers of industrial and agricultural chemicals and crop seeds....This is, undoubtedly good news for the financial wizards who will consult on this merger and the newly crowned CEOs. It's not good news for the future of corporate America, as this column by WSJ's Dennis K. Berman notes (ht anon) - if this is how huge conglomerates plan to make more profits (rather than reinvestment in capital and R&D), we are in serious trouble.
I can't imagine this is good news for the industrial chemists of America (and the world), either. I presume that there will be plant closures and R&D cuts to follow; I don't think it's a coincidence that, after the divestment of DuPont's fluorochemicals business to Chemours, Chemours has been busily laying people off and closing plants. I predict this means more mid-career chemists let go, slower wage growth for chemists, lower retirement and health benefits, fewer entry-level R&D positions for chemists at the new companies and lower starting salaries.
I hope I am wrong.
Best wishes to the employees of Dow and DuPont - and to all of us.