Dow and DuPont have reached a proposed agreement with the U.S. Department of Justice that will allow the companies to proceed with their merger.
The deal, which is still subject to court approval, would require DuPont divest some of its crop protection portfolio, while Dow would divest some of its plastic copolymers and ionomers business. The conditions are in line with the commitments made to obtain approval from the European Commision and don’t require any additional divestitures, according to the companies.
“As originally proposed, the merger would have eliminated important competition between Dow and DuPont in the development and sale of insecticides and herbicides that are vital to American farmers who plant winter wheat and various specialty crops,” said Assistant Attorney General Andrew Finch. “In addition, it would have given the merged company a monopoly over ethylene derivatives known as acid copolymers and ionomers that are used to manufacture many products, including food packaging. The remedies obtained by today’s settlement, including the divestiture of DuPont’s market-leading Finesse and Rynaxypyr crop protection products, will preserve vigorous competition in the sale of these products and benefit American farmers and consumers alike.” (Read more from the Depart of Justice decision here.)
DuPont has already agreed to sell FMC its global cereal broadleaf herbicide and global chewing pest insecticide portfolios, as well as much of DuPont’s global crop protection R&D capabilities.
“We are very pleased that the DOJ has approved this transaction,” said Andrew Liveris, Dow’s chairman and chief executive officer, in a release issued late Thursday. “With today’s DOJ clearance, we have taken a significant step forward in bringing together these two iconic enterprises, and in the subsequent intended separation into three leading, independent innovation-based science companies that will generate significant benefits for all stakeholders.”
With regulatory clearance in the U.S., Europe, Brazil and China, the companies say they still expect to close the US$130 billion merger before the end of August. Canada is one of the countries Dow and DuPont are still waiting for.
“With this review completed, we are on track to close our procompetitive merger in a manner that maintains the strategic logic and value creation potential of the transaction,” said Ed Breen, chair and chief executive officer of DuPont.
The plan is to split the merged company into three independent businesses focusing on agriculture, material science and specialty products. The companies say proposed spin-offs would occur within 18 months of the deal closing, with the material science business separating first.
- FMC Wins Bid For DuPont Crop Protection Assets
- DuPont to Sell Crop Protection Assets to Gain European Approval
- Dow and DuPont Announce Merger
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