Dow's Acquisition Program

This case illustrates how Dow Chemical acquired and integrated Wolff Walsrode, a German specialty chemicals firm that was part of the Bayer Group. This acquisition, combined with Dow's existing cellulosics unit, helped it create a new specialty business with a forecasted $1.1 billion in annual sales and strengthen its footprint in Central and Eastern Europe.

The main challenge in this case concerns the complexities of acquisition integration, which are demanding in spite of Dow's extensive experience and track record. Dow is confronted with various integration challenges and faces several decisions concerning the degree and speed of integration of Wolff Walsrode and one of its units, Probis. The decisions pit considerations of rapid cost synergy capture via leveraging global systems platforms against process technology transfer and accommodating different customers and their requirements. Along with providing a review of the importance of a multitude of codified implementation templates and tacit integration mechanisms, this case illustrates how Dow's M&A integration personnel prove their worth by ensuring Wolff's successful integration.

The case confronts students with the complexities and uncertainties of cross-border acquisition integration (e.g. speed, level of integration) and the way in which a renowned serial acquirer like Dow manages a medium-sized integration. Moreover, it presents the inherent complexities involved in decision-making in the context of acquisition programs. Lastly, it underlines the pros and cons of mergers and acquisition (M&A) experience, how to appropriately use M&A experience, and the role deliberate learning mechanisms contained in Dow's M&A methodology (the M&A Technology Center) play in improving the success rate of integrating acquisitions.