The European Commission (EC) announced on 11 August that it had opened an in-depth probe into the proposed US$130bn merger of US chemical giants Dow Chemical Co and DuPont Co to investigate whether the deal may reduce competition in crop protection, seeds and certain petrochemicals.

“The livelihood of farmers depends on access to seeds and crop protection at competitive prices,” said Commissioner Margrethe Vestager, who is in charge of competition policy. “We need to make sure that the proposed merger does not lead to higher prices or less innovation for these products.”

The merger would create the world' s largest crop protection and seeds company.

The EC said that both Dow and DuPont had a strong portfolio of herbicides for a number of crops such as cereals, beets and oilseed rape, as well as of insecticides, particularly those used against chewing insects.

“The Commission has preliminary concerns that the proposed merger could reduce competition in these markets and that the reduction in the intensity of competition may have an impact on price, quality, choice and innovation.”

The investigation would also look into Dow and DuPont's activities in nematicides as well as into the companies’ product pipelines in fungicides.

In seeds, the EC said that both Dow and DuPont were developing “gene editing” technologies that could be used to accelerate the breeding of new seed varieties.

“The Commission has preliminary concerns that, after the proposed transaction, the companies may have fewer incentives to license these technologies to competitors or may make the development of competing technologies more difficult.

“The EC is investigating whether competitors' access to distributors of crop protection products and seeds could become more difficult if Dow and DuPont were to tie their sales of crop protection products and seeds.”

Within petrochemicals, the EC said that both companies were strong suppliers of speciality polyolefins and it would be investigating the effect of eliminating one competitor and creating new vertical links in these concentrated markets.

The merger was first announced on 11 December 2015 and the EC said it now had until 20 December to make a decision over its investigation.

The Dow group is active in plastics and chemicals, agricultural sciences, and hydrocarbon and energy products and services. Dow AgroSciences is a wholly-owned subsidiary of Dow Chemical Co supplying seeds, biotech solutions and agricultural pesticides.

The DuPont group develops, produces, distributes, and sells a variety of chemical products, plastics, agro-chemicals, paints, seeds and other materials. DuPont Pioneer is a subsidiary of DuPont Co and a major producer of hybrid seeds for agriculture including GM crops with insect and herbicide resistance.