The Wall Street Journal reported that E.I. du Pont de Nemours and Co. (NYSE: DD), better known as DuPont, and Dow Chemical Co. (NYSE: DOW) may merge. DuPont employs 62,000 people, while Dow Chemical employs 51,000. One major reason for mergers is to cut costs. The two companies have enough overlapping businesses that a lot of people will lose jobs. The question is how many.
The 113,000 workforce of the combined company would operate one of the world’s largest suppliers of chemicals for agriculture. Both companies provide industrial chemicals and make plastic products. Both provide electrical products as well.
Dow and DuPont each have only modest margins. Last year, DuPont made $3.6 billion in net income on $35 billion in revenue. Dow Chemical made $3.8 billion on $58 billion. Marrying the two companies should boost their combined bottom line by hundreds of millions of dollars, if not more.
The stocks in each company moved up by over 3% when the rumor hit Wall Street. Since DuPont trades well below its 52-week high, investors should be happy. Someone loses in many mergers, however. Some members of management are fired, and so are a large number of other workers. The open issue in a DuPont merger with Dow Chemical is how many?
Sponsored: Tips for Investing
A financial advisor can help you understand the advantages and disadvantages of investment properties. Finding a qualified financial advisor doesn’t have to be hard. SmartAsset’s free tool matches you with up to three financial advisors who serve your area, and you can interview your advisor matches at no cost to decide which one is right for you. If you’re ready to find an advisor who can help you achieve your financial goals, get started now.
Investing in real estate can diversify your portfolio. But expanding your horizons may add additional costs. If you’re an investor looking to minimize expenses, consider checking out online brokerages. They often offer low investment fees, helping you maximize your profit.
Thank you for reading! Have some feedback for us?
Contact the 24/7 Wall St. editorial team.