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EU clears Dow-DuPont chemicals mega-merger

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Author: Agence France PresseMon, 2017-03-27 (All day)ID: 1490635411489969400
BRUSSELS: The EU on Monday approved a $130 billion mega-merger of US agro-chemicals giants Dow Chemical and DuPont, paving the way for major consolidation in a sensitive sector for farmers and the environment.
The decision by antitrust regulators was subject to Dupont selling “major parts” of its global pesticides business, said the European Commission, the EU’s executive arm.
“Due to significant commitments on products and the worldwide research and development organization, the merger of Dow and Dupont can be approved,” EU Competition Commissioner Margrethe Vestager said.
Dow Chemical and DuPont, two of the oldest US companies, announced their tie-up in December 2015 to create the world’s biggest chemicals and materials group.
The decision spares the EU from angering the administration of US President Donald Trump, just days before Vestager visits Washington.
Vestager has not been shy of tackling major US companies since she took on the competition brief in 2014, winning praise in Europe but criticism across the Atlantic.
“This regulatory milestone is a significant step toward closing the merger transaction, with the intention to subsequently spin into three independent publicly traded companies,” the companies said in a joint statement.
The EU’s demand is “pro-competitive and maintains the strategic logic and value creation potential of the transaction,” the statement added.
Dow and Dupont are dominant players for a huge range of chemical products, but the manufacturing of pesticides and fertilizers has drawn the most attention.
The products developed by the Dow and DuPont “affect each and every one of us. They literally affect our daily bread,” Vestager told a news conference in Brussels.
To win approval, the companies agreed to sell off key DuPont pesticides units, including sensitive research and development capabilities.
Dow will be required to sell two manufacturing plants in Spain and in the US, with German giant BASF widely seen as a potential buyer.
The Dow-Dupont merger is part of a broader wave of consolidation in the agro-chemicals sector that has worried environmental activists and small farmers.
In the coming days, the EU is expected to decide on the $43-billion takeover bid by ChemChina for Swiss rival Syngenta.
The EU is also to decide on German giant Bayer’s $66-billion offer for US firm Monsanto, another mega-merger in the industry that has angered activists.
Opponents to the deals warned that the tie-ups would deepen threats to the environment, bring higher prices to struggling farmers as well as boost the controversial genetically-modified crops industry.
If all tie-ups are successful, “the three resulting companies could control around 70 percent of the world’s agro-chemicals and more than 60 percent of commercial seeds,” said a letter from Friends of the Earth and co-signed by Greenpeace and dozens of other groups.
“Through dominant market share and sheer political power, they would unduly influence our agriculture and food system,” added the letter, which was dated Monday.
Vestager is due in Washington on Friday. She has pushed through a series of anti-competition probes of Google and Amazon as well taking a historic 13-billion-euro decision against Apple.
Some US critics say she unfairly targets American companies but Vestager insists she has simply applied European Union competition rules.
Main category: Business & Economy

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