The $130 billion merger between Dow Chemical and DuPont has become the first of three agribusiness mega deals to win conditional approval in the European Union, regulators announced on Monday.
Final approval will depend on the divestiture of major parts of DuPont’s global pesticide business, including its research and development branch, according to the European Commission, a key agency in charge of evaluating antitrust concerns.
“Pesticides are products that matter — to farmers, consumers and the environment,” said Commissioner Margrethe Vestager, who is in charge of competition policy, in a statement. “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.”
With the conditional approval, the Dow-DuPont deal has made it further than similar agreements reached between Monsanto-Bayer and Syngenta-ChemChina.
The three pending merger agreements are valued at a combined $239 billion.
Agribusiness powerhouses have gobbled up hundreds of small-scale seed companies since 1990, research from Texas A&M University’s Agricultural and Food Policy Center reveals. Those buyouts have left just a few dozen independent sellers remaining. The vast majority of the corn seed market is dominated by four companies: Monsanto, DuPont, Dow Chemical and Syngenta AG. The same four companies control most of the soybean seed market as well. | Continue reading…
Once completed, Dow and DuPont will ultimately split their merged companies into three independent firms, including one agricultural company with business centers in Indiana and Iowa. U.S. regulators have yet to issue a decision on the merger, and it is unknown when exactly that will take place.
Dow and DuPont are both headquartered in the United States.
In a statement, the companies called the announcement a “regulatory milestone” and a “significant step toward closing the merger.”