What would a DuPont/Dow merger mean for Delaware?

It depends which company comes out on top, according to the University of Delaware’s leading voice on corporate governance.

Shares of Dow and DuPont traded sharply higher on Wednesday following reports in the Wall Street Journal that the two giants of the chemical industry are planning to merge. Dow shares were up 11 percent, while DuPont was up 12.5 percent in early trading Wednesday.

But the University of Delaware’s Charles Elson says not so fast.

“Just because people talk, doesn’t mean it happens.” Elson is director of the John L. Weinberg Center for Corporate Governance at UD. Even if an agreement was made between the companies, the merger would face more hurdles. “Does it clear antitrust? Which is important because the government has stepped in a number of mergers lately and stopped them,” Elson said.

The WSJ report says the merged company would be split into three entities focused on agriculture, specialty chemicals and materials.

Since it’s founding on the banks of the Brandywine River in Wilmington, DuPont has dominated the Delaware business scene. But after more than 200 years, could a merger bring that impact to an end? If Dow becomes the dominant company after a merger “it’s very problematic for Delaware,” Elson said. “If it’s DuPont there may be a different conclusion. We just don’t know.”

Elson is taking a wait and see approach on the merger discussion.

“It’s rare, though, that they actually pan out. Discussions go on many, many times. The actual merger itself to be consummated, it’s a long road between a talk and a merger. I think at this point it’s a little premature to rule DuPont out of Delaware.”