Dow's Acquisition Program: One sheep leapt over the ditch, but will Wolff follow?

摘要

Dow Chemical Company (Dow), the U.S. based chemical giant, has been moving from basic to specialized chemicals through merger and acquisitions (M&As). With its US$11.6 billion acquisition of Union Carbide Corporation (UCC), Dow started off one of the most challenging acquisition programs in the chemicals industry thus far. Dow’s Executive Board called upon one of its most seasoned managers, Randy Croyle, to establish a Program Management Office (PMO). The PMO, later renamed the M&A Technology Center (the Center), was charged with preparing the UCC integration and was subsequently responsible for integrating all of Dow’s M&As. To successfully implement this acquisition program, Randy created an expert team to put together Dow’s M&A methodology that today consists of over 100 codified in-depth integration templates. As part of the acquisition program, Dow acquired Wolff Walsrode (Wolff) in 2007, a German specialty chemicals firm and part of the Bayer Group. This acquisition, combined with its existing cellulosics unit, helped Dow become a significant player in the cellulosics industry and strengthened its footprint in Central and Eastern Europe. Once again, Dow’s M&A methodology was applied to ensure the firms’ smooth integration. While the Dow-Wolff management team’s decisions followed the templates, deviations from standard procedures were also made due to the complexity of the project. Dow faced major challenges: it had to decide to what extent and how quickly it should integrate Wolff (a full or partial integration), and how to integrate the part of Wolff’s business that did not fit Dow’s portfolio. The question is: given the specific integration challenges with Wolff, could Dow again be able to pull off a successful deal?