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 tospecialized chemicals through merger and acquisitions (M&As). With its US$11.6 billionacquisition of Union Carbide Corporation (UCC), Dow started off one of the most challengingacquisition programs in the chemicals industry thus far. Dow’s Executive Board called upon oneof 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 withpreparing the UCC integration and was subsequently responsible for integrating all of Dow’sM&As. To successfully implement this acquisition program, Randy created an expert team to puttogether Dow’s M&A methodology that today consists of over 100 codified in-depth integrationtemplates.As part of the acquisition program, Dow acquired Wolff Walsrode (Wolff) in 2007, a Germanspecialty chemicals firm and part of the Bayer Group. This acquisition, combined with itsexisting cellulosics unit, helped Dow become a significant player in the cellulosics industry andstrengthened its footprint in Central and Eastern Europe. Once again, Dow’s M&A methodologywas applied to ensure the firms’ smooth integration. While the Dow-Wolff management team’sdecisions followed the templates, deviations from standard procedures were also made due to thecomplexity of the project. Dow faced major challenges: it had to decide to what extent and howquickly it should integrate Wolff (a full or partial integration), and how to integrate the part ofWolff’s business that did not fit Dow’s portfolio. The question is: given the specific integrationchallenges with Wolff, could Dow again be able to pull off a successful deal?