The Competition Commission of South Africa recommended on 5 July that conditional approval be given to the proposed merger between US chemical giants DuPont and the Dow Chemical Company.
With the decision, South Africa will join China, the EU and the USA, which have already approved the US$130bn merger deal, first announced in December 2015.
The commission found that although there was no direct overlap between the businesses since Dow did not have maize seed commercial operations in South Africa, the merger was still likely to result in removal of competition as Dow was planning to enter the country’s maize market.
The merger was also likely to lead to a “substantial prevention or lessening” of competition in the insecticide market, the commission said in a statement.
To alleviate the commission’s concerns and secure full approval, Dow has agreed to make 81 maize hybrids and seven inbred lines available to third parties for licensing in South Africa.
Dow will also be required to register its PowerCore and Enlist biotechnology traits in South Africa within two years of the merger’s approval.
In relation to insecticides, DuPont will have to divest its entire insecticide business, including all R&D associated with developing new products.
Dow’s activities in South Africa include the distribution of sunflower seeds, agrochemicals, material science products and food texturisers, whereas DuPont is involved in the distribution of various seeds – including maize and sunflower seeds – and agrochemicals.