Group Company Report


Hello, I’m a Second language so please avoid fancy or complicated vocabulary, just write a regular guaranteed A paper and the professor checks for plagiarism so no coping please. and write answers to the following questions in a word document.


Group Company Project


Introduction. 1

History/ Background of the Company. 1

Nature of the Industry. 3

Organizational Structure. 5

Conclusion. 7

Works Cited. 8


            A merger is a deal that brings together two existing companies into one (Manne 115). In today’s world of business, mergers and acquisitions have become the norm. Corporate leaders often feel the need to merge in order to enhance their collective competitiveness, increase profit and minimize production costs, shield themselves from tough economic times, acquire additional resources and skills, diversify operations, and to eliminate competition (Weber 1192). This paper seeks to analyze in detail the merger between two corporate giants in the chemical industry, Dow Chemical and DuPont, and to discuss its effects.


History/ Background of the Company

DuPont was established in 1802 by Irenee Du Pont. He started by constructing its premises on the Brandywine River in order to create space for his first powder mills. By 1880, the Repauno Chemical Company, which was owned by Lammot du Pont, had become the leading producer of dynamite in the world. The year 1902 saw the company take on new owners namely Du Pont, Barksdale, Haskell, Moxham and Reese. An experimental station was built in 1903 where research and testing was carried out. In 1910, the company made one of its first products, fabrikoid, which was essentially just artificial leather. In 1912, following the loss of an anti-trust law suit, the company split into three entities: DuPont, Hercules and Atlas. In 1926, DuPont entered into an alliance with its British competitor, Imperial Chemical Industries (ICI) which was later dissolved in 1952. For DuPont, the 1930s emerged as a period of growth, extensive research and development of new products. In 1969, the company acquired Endo laboratories and was able to venture further into the pharmaceutical industry. During the 1970s and 1980s, DuPont entered the energy business and greatly increased its dominance in the electronics and pharmaceutical industries. The 1990s saw the building of a path to sustainable growth and successful efforts to expand the company in terms of both produce and resources.

            On the other hand, Dow was founded in 1897 by Herbert Henry Dow, a Canadian chemist. At first, the company, produced only bleach and potassium bromide. During World War I, Dow provided the United States with many war materials it had previously been getting from Germany. The Dow Chemical Company built its first production plant in Texas in 1941. It expanded overseas to Japan in 1952 as Asahi-Dow Limited. In 2015, Dow made public its merger with DuPont to form DowDuPont which will have an estimated value of $130 billion equally held by the shareholders of both companies. The headquarters of the companies will be maintained in Michigan and Delaware respectively.

In 1999, Dow purchased Union Carbacide Corporation, one of its largest competitors. In 2006, the company merged with Izolan, a Russian plastic producer to form Dow-Izolan. During the same year, it merged with Kuwait Petroleum Corporation in exchange for equity. Two years later, Dow bought all the common equity of Rohm and Haas. However, in December of the same year, the Kuwaiti government backed out of its partnership. In 2011, the company entered into a joint venture with the Saudi Arabian Oil Company. Ultimately, in 2015, Dow merged with DuPont to form DowDuPont.


Meanwhile, DuPont has also been engaging in a number of mergers and acquisitions in the past. In 1912, the company started buying smaller companies, but this move was met with scrutiny by the government resulting in a declaration by the court that DuPont spilt into three entities: the firm itself, Hercules and Atlas. In 1914, DuPont purchased stock in General Motors, leading to Pierre S. Du Pont being elected as chair of the company’s board. In order to provide itself with a secure source of petroleum, DuPont purchased an oil and gas company, Conoco Incorporated, in 1981. In 2004, it sold its textile business to Koch industries and seven years later, it acquired Solae in a joint venture. In 2013, the chemical manufacturing branch of DuPont broke off to form The Chemours Company and finally in 2015, it announced its planned merger with Dow chemicals. All along, regulatory changes greatly affected the companies’ business development efforts. One example was manifested in in 2015 when DuPont had to announce changes to conform to new laws and regulations. In another example, Dow was compelled to change its packaging materials in 2014 to conform to new sterile medical requirements.

Nature of the Industry

            The chemical industry is among the largest manufacturing industries in the United States, bringing in revenue of about $750 billion a year. It is also one of the top exporting centers of the country’s manufacturing industry that is healthy and robust, given that it has over 10,000 corporate entities producing more than 70,000 products (Müller-Stewens, Günter, Sven and Andreas 250). Moreover, it creates employment for more than 800, 000 workers with whose areas of specialization range from skilled to highly skilled labor. Before the announcement of the merger, Dow was the leading chemical producer in the United States with DuPont taking the third position. With the presence of such a vast and highly profitable industry, competition is inevitable. The major competitors in this field include ExxonMobil, PPG industries, Praxair, Huntsman Corporation and Chevron Philips. Some of the smaller competitors include Omnova, Innophos, Polyone and Arizona chemical.

            In order to stay relevant and ensure sustained success in the chemical industry, companies need to put in place certain measures. Firstly, research and development is fundamental to the growth, development and success of any chemical company worldwide (Weber 1201). This has been Dow’s secret weapon that has seen it rise to the second position worldwide after BASF. In 2015 alone, almost $95 billion was spent on research alone by chemical companies. Research leads to discovery of new products which greatly widens the production range of a company. Another key determinant of success in this industry is adherence to safety rules and regulations (Manne 116). Because most products manufactured are hazardous and potentially poisonous, it is critical for firms to treat their waste or to deposit it safely. Companies should also offer safety gear and appropriate work schedules to employees to avoid overexposure to occupational hazards.

            As with any other sector of the economy, changes in this industry are bound to occur with time. The chemical industry has seen very rapid change in the past years with increased manufacturers, several mergers and acquisitions and entry of key global players in the market. A major change in recent times has been the emergence of chemical producers from China and the Middle East countries, both for domestic use and export (Müller-Stewens, Günter, Sven and Andreas 330). Companies from these countries have also started purchasing equity in European and U.S. chemical companies, making the sector highly competitive internationally. However, one major challenge this situation has presented is that European and U.S. chemical companies have had to put in more effort and to reduce production costs while still maintaining high standards of quality. Oil and gas have become increasingly rare with the depletion of the existing sources. This has created the need for alternative energy sources such as coal and biomass. There has also emerged the need to reduce dependence on non-renewable sources of energy by running chemical plants at lower temperatures. This can be achieved using catalysts, which speed up chemical reactions. The industry has also began using nanotechnology to produce nanomaterials for production processes.

            A customer’s choice and decision to buy or use a certain product or service is influenced by various factors, including cultural, social, personal or psychological ones (Manne 112). Throughout an individual’s life, he/she is influenced by family, friends, and the immediate environment in determining values, needs and preferences. Social factors dictate the outside influence of others on our choice and purchases while personal factors include determinants such as age, lifestyle, economic ability and occupation. Psychological factors that may change or influence purchase decisions in the industry include a person’s motivation, perception, learning, beliefs and attitudes.

Organizational Structure

            The newly merged company, DowDuPont, is expected to take on a new structure in order maintain its dominance in the industry while increasing profit margin. The equity of both companies is to be shared equally by shareholders of both of these companies. The merger will take on a divisional structure, with the two companies coming together and subsequently splitting into three technology-based science subsidiaries. This move is aimed at creating long-term, sustainable value for the company. The three subsidiaries will deal with the agricultural business, materials science business and the specialty products business. Wilmington, Delaware will house the headquarters for the agricultural as well as the specialty products business while that of the materials science subsidiary will be in Midland, Michigan. Each of these three entities will be operating as independently-listed and publicly-traded companies. Iowa and Indiana are expected to host the global business centers for DowDuPont.

            Critics far and wide have come out strongly to oppose the proposed Dow-DuPont merger citing anti-trust issues. Activists have come out stating that the further coming together of leading manufacturers of agricultural inputs will greatly diminish the ability of smaller and newer chemical and biotechnological companies to compete favorably or even to survive in the market. They say that this merger will also create higher prices of products and fewer choices for consumers. The two leading players in this field, DowDuPont and Monsanto would now control 76 percent of the corn market and 66 percent of the soybean market respectively. The concern is that this will lead to creation of monopolistic markets and harassment of consumers.

 Nevertheless, the newly merged company will be able to greatly maintain and grow competitive advantage. Due to better and more vast resources at their disposal, DowDuPont will be able to have better and more in-depth research and development. This will be further enhanced by the need to increase the product range and create more sustainable products. The agricultural business, in particular, will really gain the company competitive advantage due to the merging of DuPont’s seed business and Dow’s chemical capabilities. This will see the company become a dominant player in the agricultural sector. Splitting of the company into three separate entities after the merger will also result in the creation of more jobs and increased internship and training opportunities. As it will be able to offer more jobs to the common citizen, DowDupont will have a better public perception and thus their products and services will be more favored in the market. DowDuPont will also have better network relationship with other companies. Due to its new diversified yet concentrated structure, the company will be able to permeate further into different sectors of the economy and create strong lasting ties between themselves and other rival as well as friendly companies.


In conclusion, as is with every corporate move, the DowDuPont merger has its share of merits and demerits. Fortunately, in this case, the benefits by far outweigh the costs especially if one puts the merger into perspective and considers the big picture. Merging these two corporate giants will result into a stronger, more diversified company that will generate more revenue not only for its shareholders but also for the country at large resulting in a growth in the country’s manufacturing industry.

Works Cited

Manne, Henry G. “Mergers and the market for corporate control.” The Journal of Political Economy, 5 (1965): 110-120.

Müller-Stewens, Günter, Sven, Kunisch, and Andreas, Binder. (eds.) Mergers & Acquisitions. Amsterdam: Schäffer-Poeschel Verlag, 2010. Print.

Weber, Yaakov. “Corporate Cultural Fit and Performance in Mergers and Acquisitions.” Human relations 49.9 (1996): 1181-1202.

Get a 10% discount on an order above $50