Seedy business

WHEN DuPont and Dow Chemical agreed to merge in December, the $130 billion deal seemed to be a prime example of American managers’ ruthless pursuit of shareholder value and dedication to building monopoly positions. The two chemicals firms, with a combined 300-odd years under their belts, had both been beaten up by activist investors in the 20 months or so leading up to the deal.

Partly in response, the companies said they would combine and then split into three new firms, focused on agriculture, speciality products (used, for example, in electronics), and materials (used in plastics). Huge cost cuts are planned when the deal closes, supposedly later this year. The unspoken message to investors is that the three new firms, with higher market shares, will also be able to raise prices.