As farmers begin to feel the crunch from low commodity prices, many crop protectant manufacturers are feeling the pain also. As quarterly earnings are being reported, Wall Street is paying attention.
The most recent development, according to Croplife Magazine, is DOW’s potential exit from the ag sector, despite DOW’s denials. This is quite the opposite from many of the rumors that are circling the industry. I had always assumed that DOW would be one of the companies to expand, due to its Enlist Duo platform, commonly know as the 2,4-D trait, which has already received domestic approval. Dupont and Monsanto were sited as potential buyers.
Meanwhile, Dupont is having its own troubles. They have been having power struggles on their board of directors, as activist Nelson Peltz has been attempting to gain control of the company. Peltz is the founder of Trian Fund Management and self-made billionaire. Dupont’s CEO, Ellen Kullmann abruptly resigned leading many to speculate that a Dupont – Pioneer split was imminent.
UPDATE: News broke today that indicates that Dupont may be looking to merge with Syngenta, or could possibly by DOW. Simply put, it’s now a cluster.
Monsanto’s $47 Billion dollar offer for Syngenta that was turned down hasn’t settled to well with Syngenta’s shareholders. As a result, their CEO, Mike Mack, has resigned amid the pressure. This opens the door for speculation about rekindling negotiations between the 2 giants.
Meanwhile, the company at the center of most consolidation rumors is making changes of its own. Earlier this month, they announced that they would cut 2600 jobs and restructure its operations to cut costs. It is my understanding that most of these cuts would come in the seed and research divisions. Late last week, Monsanto announced that they would close 3 R&D centers in Middleton, WI, Mystic, CT, & Research Triangle Park, NC.
Honestly, I started writing this post 4 days ago. There have been so many consolidation/merger/buyout rumors circulating that I’m now having trouble keeping up. I’ll try to keep the posts about this in the future much shorter. I feel very confident 1, possibly 2, of the “Big 6″ chemical companies will be consolidating in the very near future.