DuPont and Dow willing to sell assets to ease competition concerns
February 16, 2017
US chemical giants DuPont and Dow Chemical said on 7 February that they are willing to sell assets to address EU competition concerns about their planned US$130bn merger, which would create the world’s largest crop protection and seed company, reports Reuters.
The two companies were planning to complete their US$130bn union by March but an EU probe into whether the merger would reduce competition has been taking longer than expected.
EU anti-trust regulators have now given a 4 April deadline for a decision on the merger.
Both companies supply GM seeds and crop protection products to the oils and fats industry.
Dow said in the Reuters report that it had proposed “divestment of a portion of DuPont’s crop protection business and associated research and development, as well as Dow’s copolymers and ionomers business” to address competition concerns.
The two companies said they still expected the merger to close in the first half of this year, with planned spin-offs taking place about 18 months later.
The merger to create DowDuPont Inc was first announced in December 2015 and would eventually see the new entity split into three, creating separate companies focused on agriculture, speciality products and materials science.
Meanwhile, Syngenta AG, which expects its US$43bn takeover by China National Chemical Corp. closing by the end of June, said it is open to pursuing assets that might become available as a result of antitrust reviews of other mega deals in the agricultural industry.
There could be attractive seed acquisition opportunities stemming from the merger of Dow and DuPont Co or the combination of Bayer AG and Monsanto Co, Syngenta CEO Erik said at a conference in Basel, Switzerland, on 8 February.
In addition, “there are many, many seed companies around the world” that may be looking for a buyer, he said in a Bloomberg report.
The merger of ChemChina and Syngenta was first announced on 3 February 2016 but the European Commission antitrust investigation into it has been delayed twice (see Biotech News, OFI February 2017) because of concerns it would lead to higher prices of a reduced choice for farmers.
Switzerland’s Syngenta is one of the main global seeds and crop protection companies and ChemChina controls Adama, the largest supplier of generic crop protection products in Europe.