RE: Dow-Union Carbide merger

["Campbell, Jon" <Campbell@Rational.Com>]

Hi, Rob,

    It certainly raises anxiety about their combined power to derail
regulation, but it is hard to determine on what grounds we would stop them.
Multinational consolidation of economic and political power is the trend, as
you are fully aware (since you are a primary source of information about
it!).

    What would be interesting to me is to see if in any of the merger
documents there is mention of the creation/promotion of the agricultural
"Life Sciences" (biotech - genetic "engineering") aspect of either or both
companies. The anti-GE movement has not yet gotten going here, and the
potential profits for companies, if they get market acceptance, are HUGE.
Monsanto and Novartis are in very heavily, with Dow and Dupont following
behind. I don't know whether Union Carbide has any investment or plans in
it.

Jon

-----Original Message-----
From: Robert Weissman [mailto:rob@essential.org]
Sent: Thursday, August 05, 1999 11:15 AM
To: Multiple recipients of list DIOXIN-L
Subject: Dow-Union Carbide merger


What do people on the list think about this merger? Does it raise fears of
too much concentrated power in the industry? Particular concerns about
markets in specific chemicals where the two companies directly compete?

I don't know the industry well enough to make assessments of these things,
but if there are concerns in these or other areas, toxics activists should
know that there is increasing opportunity to influence federal antitrust
reviews. 

Others in various Nader-created entities and I would be willing
to work with people to try to block the merger, if there was a sense that
blocking it would matter.

Robert Weissman
Essential Information			|   Internet:	rob@essential.org


Dow Chemical To Buy Union Carbide

 Dow Chemical To Buy Union Carbide
 By JUSTIN HYDE=
 Associated Press Writer=
     DETROIT (AP) _ The Dow Chemical Co. is buying Union Carbide
 Corp. for $9.3 billion in stock, creating the world's second-largest
chemical company behind DuPont.
     The merged company, which will operate under the Dow Chemical
 name, will have $24 billion in annual revenues, putting it ahead of
 the current No. 2, Germany's BASF, according to the most recent
 rankings by Chemical Week, a magazine covering the industry.
     About 2,000 jobs will be cut as a result of the merger, leaving
 about 49,000 employees. The two companies said today in announcing the
deal that they expect the combination to save $500 million a year.
     ``This transaction is a giant step in our strategy to transform
 Dow into the world's most productive, best 'value-growth' company
 in the chemical industry,'' said William S. Stavropoulos, Dow
 Chemical's president and chief executive officer.
     Union Carbide spokesman Sean Clancy said no decisions have been
reached yet on where the job cuts will be made. The merged
 company's corporate headquarters will remain in Midland, Mich.,
 where Dow Chemical is based. (We are in hopes that by changing our name
to Dow Chemical everyone will forget about Bophal.)
     Union Carbide shareholders will own about 25 percent of Dow
 Chemical after the deal is complete, and Union Carbide Chairman and
 Chief Executive Officer William Joyce will become vice chairman of
 the Dow Chemical board of directors.
     Under the deal, Union Carbide shareholders will receive 0.537
 share of Dow Chemical for each of their Union Carbide shares _ or
 $66.96 based on Tuesday's closing price of Dow Chemical's stock.
 Dow Chemical will also assume $2.3 billion in debt. (I thought they were
going broke and had to file bankruptcy over their debt to the breast
implant victims.)
     News of the merger sent Union Carbide's stock soaring $11.68},
 or by 24 percent, to $60.50 a share this morning on the New York
 Stock Exchange, where Dow Chemical's stock slid $4.93}, or by 4
 percent, to 119.75.
     The merger depends on the approval of Union Carbide shareholders
 and regulatory authorities. (Where are the regulatory authorities?) The
companies expect the deal to be completed by the first quarter of 2000.
     ``This is the right move at a good time,'' Joyce said in a
 statement. ``In a consolidating chemical industry where fewer, more
 powerful companies will exist, the combination of Dow and Union
 Carbide now sets the gold standard for the industry.''
     Dow Chemical is second only to DuPont in the United States,
 earning $1.3 billion on sales of $18.4 billion in 1998. It produces
 a variety of chemicals, plastics and herbicides, including
 Styrofoam insulation.
     The company is a half-owner of Dow Corning Corp., the former
 silicone breast implant manufacturer which has offered to pay $3.2
 billion to settle claims from 170,000 women.
     Union Carbide, based in Danbury, Conn., was born in a merger of
 several companies in 1917 as the Union Carbide & Carbon Corp. Over the
years, it developed Prestone antifreeze, Glad plastic bags and Eveready
batteries, brands it later sold to other manufacturers.
 From the 1940s to 1984, it ran the U.S. government's nuclear
 laboratories in Tennessee and Kentucky. (nice recommendation...they
should have their charter revoked, not allowed to merge.)
     It ranks seventh in the U.S. in chemical sales and 21st in the
 world, according to Chemical Week.
     Union Carbide built a pesticide plant in Bhopal, India, in 1975.
 In 1984 a tank at the plant leaked five tons of poisonous methyl
 isocyanate gas, killing more than 3,000 people and injuring 50,000
 in the world's worst recorded industrial accident. Union Carbide
 paid a $470 million settlement in India's Supreme Court in 1989.
     Union Carbide had profits of $403 million in 1998 on sales of
 $5.7 billion.
     The deal will be completed under the ``pooling-of-interests''
 accounting method, popular in U.S. mergers, allowing the companies
 to avoid a large tax bill that would have been generated if the
 deal was an outright purchase of one company by the other.