Dow/DuPont merger: companies to sell off assets to move forward

To put to ease the European Union (EU)’s antitrust regulators’ concerns over the merger between Dow Chemical and DuPont, both companies have said they will sell some assets, according to a Reuters report. The EU’s deadline for making a decision about the merger will now be April 4, instead of March 14.

A statement from Dow said, “Dow and DuPont continue to engage constructively with the European Commission and other regulators in all relevant jurisdictions to obtain clearance for the merger, which we are confident will be achieved. As part of this process, we have submitted a remedy package to the European Commission that maintains the strategic logic and value creation potential of the transaction for all stakeholders. The remedies include proposed divestment of a portion of DuPont's crop protection business and associated research and development, as well as Dow's acid copolymers and ionomers business.”

Top concerns of the EU include increased prices and less development of new pesticides after the US$130 billion merger to create the largest chemical company in the world.

The European Commission confirmed that the companies had offered concessions. It is now expected to seek feedback from customers and rivals before deciding whether to accept them or demand more.

The merger plans between the two companies have already been delayed as the two companies were originally planning to complete the merger process in December 2016. http://plasticsandrubberasia.com/aug2016/company5.html

Plans to merge were first announced by the two companies in December 2015. http://plasticsandrubberasia.com/dec2015/company8.html

Upon completion of the merger, the new company known as DowDuPont will be split off into three separate companies, including an agriculture company with US$19 billion in revenue, a material science company with US$51 billion in revenue and a speciality products company with US$13 billion in revenue.. This process will take 18 months after the initial merger is completed.

The two companies still expect the merger to be completed the first half of 2017.

Neither party is subject to a break-up fee if regulators block the merger.