Dow Chemical Co., which gave the world Styrofoam and Saran Wrap, announced yesterday that it will acquire Union Carbide Corp., the chemical company that brought forth Prestone antifreeze, Glad plastic bags and Eveready batteries.

The proposed acquisition, valued after yesterday's stock market trading at $11.6 billion in stock and debt, would add considerable heft to Dow--the No. 2 chemical company, after DuPont Co.--at a time when the chemical industry is rapidly consolidating. Dow will take on $2.3 billion in Union Carbide debt as part of the deal.

The combined company would operate in 168 countries and have more than $24 billion in revenue. It would have about 49,000 employees after a reduction in force of approximately 2,000 jobs. William S. Stavropoulos, Dow president and chief executive, said the companies hoped to achieve much of the reduction through attrition.

The combined company would be the world's biggest maker of polyethylene, a plastic used in such consumer products as trash bags. Together the companies would control about 20 percent of the global polyethylene market and about 40 percent of the U.S. market.

Stavropoulos said he does not expect serious regulatory problems in winning approval of the merger. "We don't anticipate anything we can't handle," he said.

Stavropoulos said the combination would produce annual savings of at least $500 million and permit enhanced growth for Midland, Mich.-based Dow Chemical.

Wall Street seemed worried about the debt that Dow agreed to assume and sent its shares down $6.06 1/4 to close at $118.62 1/2. When the tax-free transaction was struck Tuesday night, the 0.537 shares of Dow Chemical stock Union Carbide shareholders would receive for each of their shares valued Union Carbide at $66.96, a premium of roughly 37 percent over Tuesday's closing price. Yesterday, Union Carbide's shares shot up $10.56 1/4, closing at $59.37 1/2.

Petrochemical stocks soared globally yesterday, in anticipation of further consolidation, after news broke of the Dow-Union Carbide deal.

James N. Kelleher, a chemical industry analyst with Argus Research Corp., said the merger is a good fit of products and geography. Union Carbide is growing in Asia and plans a major facility in Malaysia, he said, while Dow Chemical is strong in Europe and South America. The merger also would expand the array of products that the company could offer its industrial customers, making the new Dow "more of a one-stop shop," he said.

Union Carbide's chairman and chief executive, William Joyce, who would become vice chairman of Dow Chemical, said the companies have similar cultures.

Both companies have had some tough times in the glare of an unflattering public spotlight.

Dow has had to contend with litigation over breast implants produced by Dow Corning Inc., which plaintiffs said had damaged their health.

In the 1960s, Dow was the object of widespread protest during the Vietnam War as the producer of chemicals used in a defoliant known as Agent Orange that U.S. forces sprayed across broad swaths of countryside to eliminate cover for the enemy. Chemicals in the defoliant later were linked to birth defects in animals.

Union Carbide, based in Danbury, Conn., suffered through a 1984 disaster in Bhopal, India, when a poisonous gas leak at a plant in which it owned a 51 percent interest killed 6,500 people and injured many others.

Union Carbide no longer produces consumer products but makes a range of chemicals used by other companies for pharmaceutical, personal-care and other consumer items.

Stavropoulos said the merger will "jump-start" the company's growth, resulting in a broader portfolio of products and increased productivity.

The highly cyclical chemical industry is moving through a wave of growth by acquisition. Observers have been speculating on the possibility of a merger of global giant DuPont and Monsanto Co.

Stavropoulos and Joyce, who have known each other for 20 years, said they began talks in earnest about a month ago, with intense negotiations over the past five or six days to seal the deal.

COMPANIES IN PROFILE

Dow Chemical

Business: Makes and sells chemicals, plastic materials, and agricultural and consumer products worldwide.

Based: Midland, Mich.

Origins: Founded in 1987; its first product was chlorine bleach.

Employees: 39,000

1998 sales: $18.44 billion

1998 net income: $1.31 billion

Yesterday's closing stock price: $118.621/2, down $6.061/4

Ticker symbol: DOW on the NYSE

Web address: www.dow.com

Union Carbide

Business: Makes basic and specialty chemicals, such as for use in polyester and antifreeze.

Based: Danbury, Conn.

Origins: Traces back to two chemical companies -- National Carbon, founded in 1886, and Union Carbide, 1898

Employees: 11,600

1998 sales: $5.66 billion

1998 net income: $404 million

Yesterday's closing stock price: $59.371/2, up $10.561/4

Ticker symbol: UK on the NYSE

Web address: www.unioncarbide.com

SOURCES: Hoover's, Bloomberg News

CAPTION: Dow CEO William S. Stavropoulos doesn't expect regulatory problems.