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Marc Créach

DuPont - Dow merger: HR challenges

DuPont and Dow announced their merger in 2015. This 130-billion-dollar union should take place during the first semester 2017.

In such a deal, as far as Human Resources both companies have to address major internal transformation challenges. Photo: © Syda Productions / shutterstock.com

In such a deal, as far as Human Resources both companies have to address major internal transformation challenges. Photo: © Syda Productions / shutterstock.com

A merger: what for?

Merging operations represent one of the main methods of development available to companies to enhance their strategic position within their respective environments. If this type of operations has recently been flourishing again, mergers keep raising many questions as regards their actual economic efficiency. Indeed, although there is no doubt companies are much interested in getting closer via this sort of process, the reality of the operations involved shows how difficult it is for companies to improve the performance of the new entity.

A merger has several objectives.

First, it contributes to creating synergies. The term “synergy” refers to any combination of several activities, with a view to enhance performance and reduce costs. These two contradictory objectives are the main reasons behind merging operations.

A merger helps diversify or refocus activities. A company which merges to diversify its activities may purchase another in a very different industry. This way, it reduces the impact of the performance in a particular industry on its profitability.

As for the companies that try to refocus their activities, they merge with others with a better penetration rate on a market or strategic industry.

Merging accelerates growth and increases the company’s power to negotiate. As a result, the whole entity can increase its market share, without really having to make efforts from an internal standpoint. This type of merger is called “horizontal amalgamation”.

Ultimately, a merger helps get rid of competitors: a buyout helps limit competition and quickly gain market shares.

Other than “technical” objectives, a merger involves the union of two cultures: here, DuPont and Dow have two completely different cultures.

The DuPont de Nemours culture, or technicians and brands culture

DuPont is technique, innovation, and products with a high added value. Kevlar, Nylon, Lycra, Téflon, and Fréon are all brands developed by the Wilmington company. The DuPont culture is focused on technically developing products and promoting brands.

The Dow culture, or production and volume culture

Originally, Dow was a utility manufacturer, which involves strong logistics optimization on a very competitive market. When they purchased Rohm & Haas in 2009, they were able to refocus their activities on chemical specialties, but they did not really change their culture, which is turned towards the productive tool.

Conclusion

These are major internal transformation challenges that Human Resources need to address. Merging also involves a transformation of the competitive landscape and represents an opportunity for related companies to position themselves on non-strategic know-how as part of the new entity.

© 2017 - Premium Beauty News - www.premiumbeautynews.com
about Marc Créach
Marc Créach

Marc Créach is Managing Director of Praxion - Chemical Talents (UIC IDF partner member).

As a partner member of the Union of Chemical Industries IDF, Chemical Talents was created by the Praxion Group, founded in 1979 and NF Recrutement-certified, to help companies specialized in chemistry and formulation, including of cosmetics, develop.

Our group counts 25 salaried employees. A presentation of our structure is attached.

As the first recruitment strategy in France for the industry of chemistry and formulators, at Chemical Talents, we meet our partners’ requirements by finding experts in their trades, in France and all around the world. Building on the expertise of our consultants, who are experienced in our industry, our firm can offer any type of profiles, both for commercial/marketing positions and production, R&D, or support functions.

Today, our missions are fulfilled by six consultants exclusively focused on this industry, via direct targeted approaches or mixed approaches. They are distributed as follows: 60% business / marketing / commercial / support, 20% innovation / R&D, and 20% production.

Website: www.chemicaltalents.com

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