Word: du
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Dates: during 1980-1989
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...Du Pont, the planned acquisition of Conoco is a daring departure. The 179-year-old firm, which started as a gunpowder business on the banks of Delaware's Brandy wine Creek, now sells everything from synthetic fibers and insecticides to cookware coatings and auto paints. But for the company that invented nylon and Teflon, growth has come mainly from in-house research and innovation rather than conglomerate building. The addition of Conoco would more than double Du Pont's size, and some Wall Street analysts fear that the new colossus would lose some technological drive. Says John Henry...
...Du Pont will have to borrow $3 billion to finance the purchase, which would more than double its debt load, and some observers think that Conoco might be too much to digest. Du Pont has a reputation for being a tightly run company that frequently shifts managers between product lines to give them broader experience. Asserts Thorn Brown, an analyst with the investment firm of Butcher & Singer: "There's no easy way to integrate Conoco into the Du Pont operation...
Wall Street was also shocked because Jefferson had been chief executive of Du Pont for only two months, since the retirement as chairman of the highly respected Irving Shapiro. After the merger announcement, Jefferson admitted that he had been forced "to make a very quick assessment of whether it was worth throwing our hat into the ring." In fact, one of the first steps Jefferson took in assessing the merger was to call Shapiro for advice. Recalls Jefferson: "We thought about it and concluded that in a merger with Conoco we would be stronger than as Du Pont alone...
...Du Font's interest in Conoco is understandable. Petroleum is the raw material for some 80% of its products. Like all chemical makers, Du Pont has been badly hurt by the surge in oil prices since 1973. Now Du Pont will have its own private supply of crude. Last year Conoco produced 374,461 bbl. of oil per day worldwide, of which 36% came from U.S. wells. Moreover, Jefferson contends that Du Pont scientists will be able to help Conoco develop new techniques for boosting the yield from oil wells and converting coal into synthetic fuel. Conoco...
...Du Font's surprise foray shows that few companies or industries are immune to merger fever. As a result, the ranking of top U.S. firms has become almost as volatile as Billboard magazine's Hot 100 pop record chart. The strategies behind the mergers are as varied as the deals themselves. American Express, for example, grabbed the Shearson Loeb Rhoades brokerage house on its way to becoming a one-stop financial service center. To enhance its power on grocery shelves, Nabisco merged with Standard Brands...