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Commission clears merger between Dow and DuPont

The European Commission has cleared a proposed merger between US chemical companies Dow and DuPont, subject to conditions including the divesture of much of DuPont's pesticide business.29 Mar 2017

Around half of DuPont's pesticide operations will be sold, as well as two of Dow's petrochemical manufacturing facilities, the Commission said.

The Commission was concerned that the merger would have reduced competition on price and choice in a number of markets for existing pesticides, and reduced innovation in an industry where only five players are globally active throughout the entire R&D process, it said.

It was also concerned about reduced competition for some petrochemical products where the companies' activities overlap.

"The commitments submitted by Dow and DuPont address these concerns in full," the Commission said.

DuPont will now divest its herbicide and insecticide businesses, including the facilities where the products are manufactured and all relevant staff. It will also divest a licence to its product for rice production in the European Economic Area to reduce concerns about the fungicide market, the Commission said.

DuPont's global research and development organisation will be sold, with the exception of a few limited assets.

Dow will sell two manufacturing facilities for acid co-polymers in Spain and the US, and give up a contract with a third party through which it buys ionomer thermoplastic resins to sell on to customers, the Commission said.

Commissioner Margrethe Vestager, in charge of competition policy, said: "Pesticides are products that matter – to farmers, consumers and the environment. We need effective competition in this sector so companies are pushed to develop products that are ever safer for people and better for the environment. Our decision today ensures that the merger between Dow and DuPont does not reduce price competition for existing pesticides or innovation for safer and better products in the future."

The merger between Dow and DuPont is one of a number of proposed mergers in the agrochemical sector.

"The Commission examines each case on its own merits. In line with its case practice, the Commission assesses parallel transactions according to the so-called "priority rule" - first come, first served," it said.