Newspaper article Charleston Gazette Mail

DOW & DuPONT ; Merger Reports Spark Concern

Newspaper article Charleston Gazette Mail

DOW & DuPONT ; Merger Reports Spark Concern

Article excerpt

West Virginia officials anxiously await information about possible merger discussions between Dow Chemical Co. and DuPont, two of the region's larger chemical manufacturers. On Wednesday, national news media, starting with The Wall Street Journal, published reports about unannounced negotiations to combine the two chemical giants, both of which operate facilities in the Mountain State and employ hundreds of its residents.

Neither company would comment on the reports, but news of Dow and DuPont possibly uniting their operations sent shares for both companies skyrocketing by more than 10 percent Wednesday.

Communications staff for both companies responded to interview requests with email messages stating that they "do not comment on rumor and speculation.

The reports of the two companies possibly merging are just the latest news to affect the chemical manufacturing industry in West Virginia.

It follows the recent finalization of DuPont's long-awaited spin- off of its "performance chemical segment into the independent Chemours Company. In July, DuPont announced the completion of that spin-off, which included a transfer in ownership of a large part of the former DuPont manufacturing plant in Belle and about half of the company's Washington Works plant, south of Parkersburg.

The possible merger talks also come a decade and a half after Dow finalized its takeover of Union Carbide, in 2001. As part of that deal, which had big impact on the Kanawha Valley region, the Michigan-based company took over Carbide's plants in South Charleston and Institute.

The Institute plant had been operated by Bayer Crop Science of late, but it recently was announced that Dow would start taking over portions of the 450-acre site.

Kevin DiGregorio, executive director of the Chemical Alliance Zone, said Wednesday that a merger between Dow and DuPont could have widespread implications, but he said it likely wouldn't have as large an impact as did the takeover of Union Carbide. However, any type of merger discussions are important to the employees who work for those two companies, he said.

"I don't look at it as positive or negative, DiGregorio said. "We will work with both entities or the new entity or whatever it takes.

If any type of deal were to go through, DiGregorio said, it likely would be challenged by federal antitrust regulators. He said that is another likely barrier that would need to be cleared.

The chemical manufacturing industry makes up about one-fifth of West Virginia's manufacturing jobs, according to the 2015 West Virginia Economic Outlook, produced by West Virginia University, but the industry in the Kanawha and Ohio river valleys isn't what it once was in the past.

Still, local economic development officials see the chemical manufacturing industry as a keystone in a state that has seen unemployment numbers climb to one of the highest rates in the country. …

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