Dave Dickey
Dave Dickey

Two of the United States’ most storied corporations – DuPont and Dow Chemical – want to merge in the second half of 2016 in a deal worth an estimated $120 billion.

But don’t blink.

Just as soon as the two mega corporations merge under the new name DowDuPont, the plan is to break up the newly formed company into three other new businesses.

That split would create a materials company for production of plastics and other commodities, a specialty chemical company, and – look out Monsanto – the world’s largest agricultural company for the production of pesticides and genetically modified seeds. That agricultural company would have an estimated annual revenue of $19 billion dollars.

Everyone in on the wheeling and dealing has been mostly mum, providing just the bare-bone facts. The deal is mostly being pushed by billionaire corporate investors (some would say raiders) Nelson Peltz , who heads the hedge fund Trian Fund Management, and Daniel Loeb, who runs the hedge fund Third Point LLC.

Whether the deal will actually be good for farmers is unclear.

Will the newly formed agricultural giant take on Monsanto and produce seeds and pesticides at a lower retail price point? Or will it be more like the gas stations in your local town where all lower and increase prices in relative lockstep?

Already, DuPont has announced it will cut 10 percent of its workforce as part as the move.

Together, DuPont and Dow look to trim roughly $3 billion dollars in costs.

Expect U.S. anti-trust enforcers to give the merger more than a token once-over review.

For more on the pending merger, also see: DuPont, Dow Chemical Agree to Merge, Then Break Up Into Three Companies” | The Wall Street Journal

About Dave Dickey

Dickey spent nearly 30 years at University of Illinois at Urbana-Champaign’s NPR member station WILL-AM 580 where he won a dozen Associated Press awards for his reporting. For the past 13 years, he directed Illinois Public Media’s agriculture programming. His weekly column for The Midwest Center for Investigative Reporting covers agriculture and related issues including politics, government, environment and labor. Email him at dave.dickey@investigatemidwest.org.

This column reflects the writer’s own opinions and not those of The Midwest Center for Investigative Reporting.

Type of work:

David Dickey always wanted to be a journalist. After serving tours in the U.S. Marine Corps and U.S. Navy, Dickey enrolled at Rock Valley Junior College in Rockford, Ill., where he was first news editor...

Leave a comment

Your email address will not be published. Required fields are marked *