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Dow Chemical and DuPont Plan Huge Merger Followed By a Split (nytimes.com)
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."
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"?
Once they spit the new companies will be named Dow Du and Pont.
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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?
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... :(
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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?
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Always has been the job of chemical companies, and always will be.
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.
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.
Are the regulators that corrupt?
Absolutely. I expect this to sail through unless it rustles the jimmies of some other large corporation.
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.
Ultimately, what is a lobbying group but institutional level major bribes being paid to get something in return?
A lobbying group is an organization for bringing the opinions and interests of their clients to the attention of the legislators. It's a set of specialists who do the constitutionally guaranteed "right to petition the government for redress of grievances" for their clients - professionally as members of an organization of interested parties, or both.
Of course if the legislators are corrupt, lobbyists for small-but-rich interests may resort to bribes. But lobbyists for very large groups don't need to do that. They can offer, instead, more votes from the people whose interests the legislator is supporting - or at least not opposing. These are votes that the members will chose to give voluntarily. (Perhaps after being informed, in turn, that the congresscritter is now working more in line with their interests. Such "being informed" might take the form of the lobbying organization giving them a "good grade" on ratings they publish periodically.)
The two largest organized interest groups, in order, are:
- AARP (over 37 million members)
- NRA (about 5 to 6 million members, whose members' lobbying is done by the non-tax-deductable NRA-ILA organization)
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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?
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