Speculation Mounts as Dow Chemical and DuPont in ‘Final Stages’ of Merger Talks
10 Dec 2015 --- Speculation of a merger between two of the world’s largest chemical companies, Dow Chemical and DuPont, intensified yesterday as details of how they would split the €130bn company if it were to go ahead, were revealed by sources close to the talks.
Media reports suggest that advanced talks are in progress that will lead to the newly formed company immediately being split into three individual companies: agriculture, specialty chemicals and materials. In current market conditions, specialty chemicals are a growing business area, while the agrichemical industry has suffered losses in recent years.
With both companies currently competing on an equal level in most areas, splitting the load and creating cost synergies of around £3bn would be feasible, say industry specialists. As would be expected with the marriage of two such big players, a potential deal would be subject to regulatory approval in many geographic areas.
The agriculture element to the deal will be watched closely by many in the food industry as agriculture is an area that has seen most problems of late, with sluggish sales in crop protection proving a problem for all the big players. Earlier this year crop protection giant Monsanto made a clear and concerted effort to buy Swiss Syngenta, a move that the latter consistently rejected and Monsanto eventually gave up.
Low crop prices have also remained a problem for the agriculture sector and mergers speculation to ease the pain has been rife.
Shares in DuPont had their biggest daily gain in six years yesterday, while those at Dow hit an all-time high.
A spokesman for DuPont told FoodIngredientsFirst that the company “does not respond to rumors or speculation.”
by Kelly Worgan
