Merger approved
EC puts Dow and DuPont for strict conditions
The European Commission (EC) clears the merger between Dow and DuPont after long deliberation. The merger started in August 2016. It sets a number of conditions under which the takeover can take place. DuPont has to divest much of its crop protection business, including its research division. The aim of the committee is not to give the brand new chemical giant too much power.
Both chemical manufacturers have their origins in the United States. Together they account for a turnover of more than 90 billion euros. The merger of the two companies, which also have production locations in Europe, creates the largest chemical company world in the field of crop protection. Reason enough for the EC to fear price competition in the field of crop protection products, among other things. In addition, the EC also believes that, due to the lack of competition, the development of new drugs will be put on the back burner.
Agricultural sector and market competition
The Committee's investigation has shown that the agricultural sector does not lose out in market competition in the field of seeds and nematicides. This is certainly the case in the field of herbicides and insecticides. The EC is demanding that both companies divest those parts. EC Commissioner Margrethe Vestager makes in the press release announced that DuPont is selling its entire R&D division for crop protection products. Substance patents are also being discarded. According to the EC, this should maintain competition between chemical groups. Dow mainly has to make concessions in the field of the petrochemical industry.
In its own words, the EC strives for competition within the sector so that companies see the urgency to continue developing new products that are safer for people and the environment. Price competition for resources must also be maintained. Other companies can take advantage of DuPont's sales.
No party yet
The champagne bottles at both companies cannot yet be uncorked. The US authorities have yet to give their approval. In the meantime, the EC can already bite into the next case. An investigation into the acquisition of Syngenta by ChemChina is still ongoing, a decision will be made in mid-April. Here too, it is all about the growing size of the chemical giants worldwide.
According to the committee, there are still only five players active on the European market, which focus entirely on the development and production of new crop protection products: BASF, Bayer, Syngenta and the takeover players of these companies.
Niels van der Boom
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