Receive $80 Grab vouchers valid for use on all Grab services except GrabHitch and GrabShuttle when you subscribe to BT All-Digital at only $0.99*/month.
Find out more at btsub.sg/promo
[BRUSSELS] Dow Chemical Co and DuPont Co won European Union approval for a US$77 billion merger, overcoming regulators' concerns with hefty concessions, including the sale of large parts of DuPont's global pesticide business.
The takeover, announced a year ago, is the first to win approval out of a trio of mega-deals that would reshape the global agrochemicals industry. The others are Bayer AG's plan to buy Monsanto Co and China National Chemical Corp's agreement to buy Syngenta AG. The combined transactions would whittle down six industry players to three behemoths in America, Germany and China.
The EU said the deal could have allowed the companies halt work on new chemical products in areas where they compete head-to-head. There was "specific evidence" that Dow and DuPont would have cut back on the amount they spent on developing innovative products, the European Commission said in an emailed statement. Only Bayer AG, BASF SE and Syngenta match the two firms in discovering, developing and selling agrochemicals.
DuPont has agreed to divest "a significant part" of its existing pesticide business, including R&D activities. That covers herbicides for cereals, oilseed rape, sunflower, rice and pasture as well as insecticides used for fruits and vegetables. The sale includes plants where the products are made and relevant personnel.
DuPont's "global R&D organisation" will mostly be sold too. Dow will sell two plants in Spain and US that make acid co-polymers.
The EU didn't say who would buy the assets. It did flag "regular exchanges" on the deal with the US Justice Department and competition authorities of Australia, Brazil, Canada, Chile, China and South Africa.
BASF SE attended a closed-door hearing with regulators on the deal earlier this year, which may show its interest in acquiring assets sold by Dow and DuPont. FMC Corp and American Vanguard Corp have said they might want to pick up businesses sold by others in the current merger wave.
ChemChina and Syngenta have an April 12 deadline for an EU decision, and the companies have also made concessions to try to win over regulators.
Bayer plans to file for EU approval of the US$66 billion purchase in the second quarter after regulators sought more information.