“The Union Carbide Deal” presents critical issues of corporate survival and renewal involving difficult managerial finance issues. In the period under discussion Union Carbide – at the time one of America’s largest companies – dealt with severe shocks to its business and financial stability. The case reviews the company’s efforts to deal with its choices and with the involvement of key financial intermediaries in providing roadmaps to these choices. It illuminates the broad spectrum of alternatives available in the capital markets and the tradeoffs in following difficult alternatives. In particular it highlights the shifting emphasis between debt and equity as the company struggled with its financial demands. The case provides realistic understanding of the viewpoint of corporate financial management in crisis situations and the interplay with investment banks in finding the best solutions in the capital markets to deal with fundamental financial issues.

The case “The Union Carbide Deal” highlights three phases of the company’s financial situation. The first phase includes the Bhopal plan disaster and GAF takeover attempt. The second phase is the debt burden, and the final phase is the bank financing and equity.
In discussing the first phase, the Bhopal accident is really the catalyst for all the financial issues Union Carbide experienced from 1984 when it occurred until long past the end of the case and its eventual merger with Dow Chemical. As described in a New York Times article by Claudae Deutsch, “the bitter aftertastes continue to tarnish their corporate reputations….Those issues have had lingering impacts on their valuations on Wall Street,'' (Deutsch, p.2)
The impact of this devastating loss of human life was understandably massive on Union Carbide, threatening their financial stability and public perception, so much so that the Wall Street