Dow, Union Carbide Announce Merger
MIDLAND, MI — The Dow Chemical Co. and Union Carbide Corp. announced a definitive merger agreement that would create a chemical-industry giant rivalling DuPont Co. for the top spot among U.S. chemical companies, with combined annual revenues of more than $24 billion.
The company would retain the Dow name following the $11.6-billion merger. Under terms of the stock transaction, Union Carbide shareholders will receive 0.537 shares of Dow stock for each share of Union Carbide stock they own. Union Carbide Chairman and CEO William Joyce will become vice chairman of the Dow board of directors.
The proposed deal is expected to face tough scrutiny from trade regulators, who are likely to examine areas of overlap between the merger partners. Both companies are major producers of polyethylene, ethylene glycol and propylene oxide, among other products, and reports suggested that Federal Trade Commission officials could request divestitures of certain businesses before giving the merger a green light.
Both companies are major raw-materials suppliers to the coatings industry. Union Carbide, based in Danbury, CT, produces a range of solvents, resins, intermediates, emulsions and additives. Dow, based in Midland, MI, manufactures acrylic, styrene butadiene, epoxy and polyurethane resins; solvents and coalescents; hardeners; gylcol ethers; dispersing and antifoam agents; glycol ethers; and others.
The companies said they expect to complete the merger early in the first quarter of 2000.