Canadian Plastics

Europe clears Dow-DuPont merger subject to conditions

April 4, 2017   Canadian Plastics

The European Commission (EC), the governing body of the European Union, has approved the US$130 billion merger of U.S. chemical suppliers Dow Chemical Co. and DuPont Co., subject to the divestiture of Dow’s acid copolymer production facilities in the U.S. and Spain, as well as divestiture of major parts of DuPont’s global pesticide business, including its global R&D organization.

In a decision announced on March 27, the EC said Dow and DuPont’s activities overlap in certain petrochemical products, specifically the combined market shares of the two companies in the acid copolymer market.

DuPont will be required to sell its nine-herbicide portfolio of products used on cereals, rapeseed, sunflower, rice, and pasture grass. And it will have to find a buyer for its insecticides that target chewing and sucking insects in fruits and vegetables. The sales will include manufacturing facilities and employees.

“Pesticides are products that matter — to farmers, consumers and the environment. We need effective competition in this sector so companies are pushed to develop products that are ever safer for people and better for the environment,” said Commissioner Margrethe Vestager, in charge of competition policy.

The goal is to make sure that the merger “does not reduce price competition for existing pesticides or innovation for safer and better products in the future,” she added.

In response, DuPont announced the decision to divest a portion of its Crop Protection business to FMC Crop on March 31 to meet the requirements of the European Commission. The divestiture, said DuPont, “will satisfy DuPont’s commitments to the European Commission in connection with its conditional regulatory clearance of the merger with Dow.”

“We believe this agreement is an excellent outcome that serves the best interests of all stakeholders, including our shareholders, customers and employees,” Edward Breen, chairman and CEO of DuPont, said in a statement.

The agreement between DuPont and Dow to merge, fusing two giants into a single mega-company worth about US$130 billion, was first announced in December 2015.


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