Corporate raiders

Nevertheless, the new corporate raiders succeeded in dismantling two of the six major U.S. core chemical companies. Allied Chemical and Union Carbide. After the raiders had finished. Allied Chemical became a specialty chemical unit in Allied Signal, accounting for roughly 25 percent of that company s revenues. In 1986, after a deadly accident at Union Carbide s plant in Bhopal, India, raider Samuel Heyman forced the company to sell off its major, long-established product divisions. It never fully recovered. Finally, in 2001, what remained of Union Carbide was acquired by Dow. 

As Du Pont and especially Dow overtook Union Carbide, the first company to commercialize petrochemicals turned to a strategy of unrelated diversification and soon paid the price. After an attempt to rationalize its new strategy of unrelated diversification proved to be technologically barren and financially unsuccessful, the company refocused on its chemical businesses, only to be destroyed by a corporate raider. In these years. Allied Chemical had all but departed from the chemical competitive arena, in part because its initial CEO, Eugene Weber, had scorned R D decades earlier. It devolved into a division producing specialty chemicals for Allied Signal s automotive and aircraft units. 

A company that is heavily in debt is said to be highly leveraged. In general, a company that is highly leveraged may be a candidate for a takeover. So too, companies with high cash ratios are good candidates. Corporate raiders are interested in such companies. 

The instant advantage which both shareholders and raiders drew from these operations was obvious. But their consequence was, sooner or later, to destabilize the enterprises concerned, when these did not disappear altogether. The most spectacular case was Union Carbide, coveted in 1985 by the real estate developer S. Hayman, who had already taken over GAF Corporation. 

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