Dow's CEO Andrew Liveris, right, and Dupont chief Ed Breen seem to be happily anticipating the success of their firms' merger.
EU SCRUTINY: DowDupont Inc. Merger Eyed for Anti-Trust Effects
Developers Said Concerned About Dow Jobs at Uptown Bay City
August 16, 2016
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By: Dave Rogers
Nervous Dow Chemical and Dupont employees worldwide and even in mid-Michigan are waiting for the other shoe to drop on the grandmother of all business mergers.
Not surprisingly, Dow Chemical and DuPont's proposed merger is under regulatory scrutiny in Europe as well as the U.S.
Dow and Dupont's shareholders approved the 50-50 merger last month but the companies still must clear global antitrust hurdles. The U.S. Justice Department in February issued a second request for information on the combination and said it was launching an in-depth probe. China's business regulatory agency was informed of the deal in May and the firms filed with the EU for approval in June.
Both companies are eliminating thousands of jobs resulting from cuts in billions of dollars in expenses, with another $3 billion of cost savings promised after the deal closes. DowDuPont aims to split into three by the end of 2018, creating separate companies focused on agriculture, specialty products, and materials science.
However, the formation of the world's largest chemical company is being delayed as government agencies both in the U.S. and the European Union probe the groups' plans, says WisconsinAgConnection.com.
Under the most optimistic scenario, all regulators will wave their magic wands over the deal by the end of the year. And the new Dow-Dupont leaders will ride off huzzahing into the sunrise.
There are, of course, potential glitches in the deal and spin-off effects on local communities. Midland, as usual during Dow machinations, is on pins and needles as the corporate bosses palaver. The usual rumors are raising blood pressures about the possibility of the headquarters moving out of the mid-Michigan cultural oasis.
At Uptown Bay City, a spanking new glass building originally constructed by SSP Associates for Dow Corning is said to be losing more than half its 400 employees. Developers reportedly are worried whether the remaining staff will be replaced or how many will continue on site to help sustain the $50 million project.
The Uptown project got a boost earlier this year when Michigan Sugar Company moved about 65 employees into the third floor of Building 4. And, when the Courtyard by Marriott opened last month, adding to the traffic sought by restaurants such as Uptown Grill and the Real Seafood Company.
Concerns over the future of Dow will hardly be alleviated unless the Dupont merger results in job growth to offset the changes inherent in the Dow Corning absorption and elimination of duplication in staff.
The European Commission said it needs to further probe 'whether the deal may reduce competition in areas such as crop protection, seeds, and certain petrochemicals.' The Brussels-based authority extended its deadline to rule on the issue until Dec. 20.
The chemical makers said they expect the deal to be wrapped up by the end of the year after winning regulatory approval and other customary closing conditions.
According to a variety of news reports, DuPont Chairman and Chief Executive Officer Ed Breen will serve as CEO of DowDuPont Inc. while Dow's CEO, Andrew Liveris will be chairman.
"Dow and DuPont will continue to work constructively with the commission to address their concerns and to obtain clearance for the merger," the companies said in a joint statement.
Recent commitments by Dow and DuPont to address some of the EU regulator's concerns were considered 'insufficient to clearly dismiss its serious doubts as to the transaction's compatibility' with EU merger rules, the commission said.
Dave Rogers is a former editorial writer for the Bay City Times and a widely read,
respected journalist/writer in and around Bay City.
(Contact Dave Via Email at email@example.com)
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