The European Commission (EC) has granted conditional regulatory clearance in Europe to the proposed merger of US chemical giants DuPont and the Dow Chemical Company.
The EC’s approval took the companies closer towards closing the merger, with the ultimate intention of creating three independent publically traded companies, Dow said in a statement on 27 March.
The transaction was expected to create approximately US$3bn worth of cost synergies, and the companies also expected to see US$1bn in growth synergies.
The EC’s clearance was conditional on DuPont and Dow fulfilling the commitments they had given to it in connection with the approval, according to the statement.
DuPont said it would divest its cereal broadleaf herbicides and chewing insecticides portfolios, along with its crop protection R&D development pipeline and organisation, excluding seed treatment, nematicides, and late-stage R&D programmes.
On 2 February, Dow signed an agreement with SK Global Chemical Co Ltd to divest its global ethylene acrylic acid copolymers and ionomers business.
Both companies’ divestitures were conditioned on them closing their merger transaction, in addition to other prerequisite closing conditions.
The newly merged company’s agricultural division would retain its parents’ crop protection assets, including a portfolio in corn and soya broadleaf and grass control and cereal weed control, alongside DuPont’s position in disease control and Dow AgroScience’s insecticide portfolio.
The companies said their new agriculture division would be “well positioned to accelerate growth, leveraging strong pipelines in both seeds and chemistry”.
DuPont and Dow said they intended to continue working with regulators in the remaining relevant jurisdictions to obtain clearance for the merger, which was first announced in December 2015 (see OFI Biotech News, January 2017).