The merger of Dow Chemical Company and DuPont, with combined market value of $130 billion, will result in creation of three separate entities in India with agriculture products, material science and specialty products as main businesses.
At present, Dow Chemicals and DuPont, with combined revenues of $1.78 billion in India, compete with each other across these verticals. Both companies do not have any significant presence in the growing agro products market, which is estimated by analysts at Rs 15,000 crore. A separate company, combining the agro product business of both companies, will be a force to reckon with, said analysts.
Any liabilities of the Bhopal gas tragedy, in which 8,000 people lost their lives in 1984, will remain with Union Carbide Corporation (UCC), which will remain a subsidiary of the new entity.
Both companies would have around 4,900 employees, which would be distributed across the three companies with many overlapping functions becoming redundant.
After the merger, Dow DuPont will have a $19-billion agriculture company that would bring together DuPont and Dow’s strong seed and crop protection businesses. This will create a world-leading agriculture company with the most comprehensive and diverse portfolio and the broadest footprint.
The new material science company is going to bring together both companies’ performance materials segments as well as Dow’s performance plastics and infrastructure solutions segment, and consumer care and Dow automotive businesses, and it’s going to create a $50 billion revenue industrials leader.
“The combination will bring both synergistic science and engineering capabilities to targeted markets. And the result will be the combined technology offerings that can provide innovative solutions for many of our packaging, transportation, construction, and durable goods customers,” said Andrew N Liveris, Dow’s chairman and chief executive officer in an analysts meet.
Finally, the specialty products company will consist of DuPont safety and protection, nutrition and health, industrial biosciences, and it will combine DuPont’s electronics and communication businesses with Dow electronic materials business. Specialty products will have combined pro-forma revenue of approximately $13 billion. All these businesses will be replicated in India.