Medium
Merger & Acquisition
Chemical Consolidation
#Industrials / Chemical
#Manufacturing
Practice this intermediate merger & acquisition case interview question from EY in the Industrials / Chemical sector. Includes detailed problem prompt, clarifying questions, structured framework, and expert recommendation. Part of ProHub's 835+ consulting case library.
ProHub Comment
This is a classic M&A case testing both valuation skills and strategic thinking. The candidate must understand synergy identification (cost and revenue), apply valuation multiples from peer data, and recognize integration risks in a consolidating industry. The case structure progresses logically from financial analysis to synergy identification to risk assessment.
Estimated Time
26 minutes
Difficulty
Medium
Source
NYU
24
/ 100
Dowling Chemical Company, headquartered in Michigan, one of the largest global chemical companies in the world that specializes in plastics with $20bn in sales, is considering a merger with industry rival Chem-X, headquartered in Louisiana, who also specializes in plastics with $10bn in sales. The management team of Dowling has retained your firm to provide a recommendation on whether or not to proceed with the merger and assess the risk/rewards of the recommended path forward.
Clarifying Information
- Plastic is each company’s only product
- Plastic is a commodity product with no differentiation
- Both operate mainly in the US and sell to the same set of customers (packaging companies etc)
- The Chem-X team will likely run the combined company
- Plastics industry is consolidated with 4 main producers accounting for 90% of market share (including both Dowling and Chem-X, who each have 25% share).