www.rdmag.com WINTER 2017 R&DMagazine 17
The development of new advanced materials and chemi- cals by themselves have relatively little value. These developments, however, are often enabling technologies
that find strong applications in many other industries. New
composites enable the development of advanced aircraft and
fuel efficient automobiles. New polymers and thin films enable the packaging of longer lasting foodstuffs. New biomate-rials enable the implantation of biostructures into the human
body that support the growth of replacement tissues for damaged or diseased body parts.
An analysis by R&D Magazine of the chemicals and advanced materials R&D environment reveals that global R&D
investments will decline 9.9% to $41.7 billion in 2017, while
the U.S. component of those R&D investments are projected
to decline 9.6% to $11.3 billion in 2017.
The big news for the 2016 to 2017 timeframe was the an-
nouncement of three mega-deals, all of which are still under-
going reviews by various government agencies from various
countries. All three are expected to be finalized in 2017:
• State-owned ChemChina’s (China) $43 billion bid for
• Bayer’s (Germany) $66 billion bid for Monsanto (U.S.)
• The DuPont-Dow $60 billion merger of equals
All three appear that they will be approved. President-elect
Donald Trump has stated that he will not stop the DuPont-Dow merger. The likely outcome of these mergers/acquisi-tions is that the combined R&D efforts will be
smaller than the additive sums of the individual
ChemChina, or China National Chemical
Corp., is looking to reduce reliance on food imports through the acquisition of Syngenta and
its portfolio of top-tier chemicals and patent-protected seeds. Years of intensive farming in
China combined with overuse of chemicals has
degraded land and poisoned water supplies,
leaving China vulnerable to crop shortages.
Only about 10% of China’s farmland is currently efficient.
The merger of Bayer and Monsanto would
create the world’s largest supplier of seed and
crop-protection products. The combined company would own 37% of the market for corn
seed and 30% of the market for soybean seed.
It would also own about 70% of the market for
cottonseeds. Bayer’s expected 2017 R&D spending was $4.88 billion. Monsanto’s expected
M&As Driving Chemicals & Advanced
2017 R&D spending was $1.66 billion.
The DuPont-Dow Chemical (2017 R&D spending equals
$1.53 billion and $1.48 billion, respectively) was proposed to
take advantage of the size of both companies to reduce expenses on some of their products. The commodity chemicals
produced by both companies are low margin products with
no distinguishing characteristics for each company’s products.
Large companies, including DuPont, have already spun off
some commodity operations to smaller companies.
The resulting DuPont-Dow company would be split into 1)
an agricultural company that combines the seeds and crop protection businesses of both companies resulting in a total global
seed share of about 41%; 2) a materials sciences company that
combines both companies’ industrial and commodity chemical
products; and 3) a specialty materials products company including nutrition, electronic materials, films, safety/protection
products and advanced bioscience-derived polymers. The cost
savings expected from the DuPont-Dow merger are expected
to be $3 billion/year from combined operations, worker layoffs and reduced overhead—most of these savings at the “low
end” of the business, the commodities. Growth synergies are
expected to be worth more than $1 billion.
Chemicals & Advanced Materials
Industry R&D Spending
The big news for the 2016
to 2017 timeframe was
the announcement of