The America based Dow Chemicals was reportedly said to be in talks to merge with another America
based chemical giant, DuPont. If successful, the deal would create Rs 11,700 crore chemical giant in
As far as India is concerned, the merger would add some thrust in the pesticide manufacturing sector and specialised chemical industry. Already Monsanto, Clariant Chemicals and some local players are
dominating the agro-chemical industry in India. Anyhow, the likes of BASF and Syngenta are at stake as the combined entity focuses on the sectors dominated by these two companies.
The deal is considered to be a threat for the European agro-chemical giants Syngenta and Monsanto as the merged entity is all set to manufacture agro-chemical products. Earlier, the former declined a merger proposal offered by Monsanto for $46 billion.
Now as the two American companies have joined hands, a fresh bid from Monsanto to merge with Syngenta could also be expected as the rise of American companies would curtail the likes of European counterparts and the latter is in a pressure to defend its position in the seeds market.
The regulatory hurdles to the transaction mean the combined company would have to sell off some businesses, presenting European peers with a window to make deals of their own. Dow Chemical’s Union Carbide India is one of the liable assets. But Dow has always claimed the latter has functioned independently with its own liabilities and assets.
The American chemical giant also said: “Union Carbide had a separate board that addressed the company’s issues in the best interest of workers, retirees, clients and creditors. It has exercised legal rights not to appear in Indian criminal proceedings.”
Thus, the global chemical industry is heading for an American consolidation as the both Dow and DuPont hold larger market cap.