The administrative arm of the European Union approved the merger of Dow and DuPont based on their promises to divest some assets, says Deutsche Welle. It was the first decision on a wave of proposed consolidations that would reshape the seed and ag-chemical sector into a “big three,” down from the six firms that now compete.
“In return for the EU green light, DuPont will sell large parts of its global pesticides business, including its global research and development organization,” said Deutsche Welle. Dow will sell two acid co-polymer plants. EU competition commissioner Margrethe Vestager said the divestitures would assure continued competition among pesticide makers.
Dow and DuPont announced their merger in December 2015, to create the biggest chemicals and materials group in the world. The new company will split into three separate companies, one focusing on agriculture, one on material science and one on specialty products.
U.S. officials have yet to rule on the merger.
“In the coming days, the EU is expected to decide on the $43-billion takeover bid by ChemChina for Swiss rival Syngenta. The EU is also to decide on German chemical company Bayer’s $66-billion offer for US firm Monsanto, another mega-merger in the industry that has angered activists,” said Deutsche Welle.
The takeover of Syngenta by state-owned ChemChina has the approval of the Committee on Foreign Investment in the United States, an important step, but still is under review by the Federal Trade Commission.
“Now that Dow and DuPont have cleared the first major hurdle, other countries are expected to follow suit,” said the Wilmington News Journal. “The merger is being scrutinized by the United States, China, Canada and Brazil. It is not known when those countries will announce a decision.” Analysts told the newspaper that the EU is regarded as conducting the toughest antitrust reviews, so other nations probably will approve the merger.