European Commission conditionally approves Dow-DuPont merger
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 transaction is expected to create significant cost synergies of approximately $3 billion with the potential for $1 billion in growth synergies.
The EC’s approval is conditional on DuPont and Dow fulfilling commitments given to the EC in connection with the clearance. The companies believe the outcome of the EC review is pro-competitive and maintains the strategic logic and value creation potential of the transaction.
Specifically, DuPont will divest its Cereal Broadleaf Herbicides and Chewing Insecticides portfolios. DuPont will also divest its Crop Protection research and development pipeline and organization, excluding seed treatment, nematicides, and late-stage R&D programs, which DuPont will continue to develop and bring to market, and excluding personnel needed to support marketed products and R&D programs that will remain with DuPont. DuPont is currently in negotiations to divest the crop protection assets.
Additionally, on February 2, 2017, Dow announced an agreement with SK Global Chemical Co., LTD. to divest its global Ethylene Acrylic Acid (EAA) copolymers and ionomers business. These divestitures are conditioned on Dow and DuPont closing their merger transaction, in addition to other closing conditions, including regulatory filings, local employment law and governance.
Following the divestiture of a portion of DuPont’s crop protection business, the Agriculture Division of the merged company will retain strong crop protection assets, including a portfolio in corn and soy broadleaf and grass control, a cereal weed control portfolio, DuPont’s position in disease control, and Dow AgroSciences’ insecticide portfolio.
The companies continue to work constructively with regulators in the remaining relevant jurisdictions to obtain clearance for the merger, which they are confident will be achieved.
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