Surprise, surprise! Dow and DuPont are merging their businesses even though the agricultural division combination will likely be looked at intensely in terms of anti-trust concerns.
Those potential anti-trust concerns were cited by Syngenta as one reason it didn’t accept Monsanto’s bid for merging those two giant ag groups. Anti-trust doesn’t seem to have scared the big D companies, both in the top six of world ag chemical companies.
You might have noticed as of Wednesday, Dec. 9, we had a poll question on our website that asked how likely people thought Dow and DuPont would merge in 2016. Prior to the merger announcement on Friday, 44 percent of 60 voters thought such a merger was “highly likely.” Of the voters, 16 percent thought such a merger was “unlikely” in 2016.
This goes to how merger talks are kept under wraps quite well in today’s corporate world. I’ve got to admit that I had no idea that Farm Journal and Vance Publishing were in discussion for several weeks prior to the announcement Dec. 1 that Vance Publishing’s agricultural division had been purchased by Farm Journal.
Who knew that Dow coveted joining up with DuPont for “more than a decade,” as suggested by Andrew Liveris. Dow Chemical CEO Liveris, who Reuters reported will be the executive chairman of the new merged company, said, “This transaction is a game-changer for our industry and reflects the culmination of a vision we have had for more than a decade to bring together these two powerful innovation and material science leaders.”
It has apparently been worked out by Dow and DuPont, according to initial reports, that they will have three business groups—agriculture, materials and specialty products. And the giant combined company will be DowDuPont.
An announcement doesn’t mean things are done and that the two companies can start operating as one immediately. In the case of the big Ds, this deal isn’t expected to officially close until the second half of 2016, even if everything moves ahead smoothly, although combining the ag divisions might be done as rapidly as any of the business units.
In the ag industry, we’ve talked about Syngenta and Monsanto extensively for months, but the wall that has kept companies operating separately might have just been crushed. More mergers and acquisitions could be just around the corner, without us knowing, because companies have been able to maintain corporate security for months and years about interest between companies for combining operations.