Agrochemical multinationals DuPont and Dow have announced that the European Commission has granted conditional clearance in Europe for their proposed merger. This regulatory milestone is a significant step toward closing the transaction.
The deal is expected to create a combined worth of £103 billion with the potential for additional growth in excess of £800 million.
The intention is then to spilt the merged business into three independent publicly traded companies which, according to DuPont, is “expected to unlock even greater value for shareholders and customers and more opportunity for employees” as each company aims to be an industry leader “where global challenges are driving demand for their distinctive offerings”.
To fulfill the EU’s conditions, however, DuPont must sell off the insecticides and herbicides arm of their business as well as much of its crop protection research and development division.
“Our decision 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,” said the EU’s competition policy commissioner Margrethe Vestager.
“We need effective competition in this sector so companies are pushed to develop products that are ever safer for people and better for the environment.”
However, a letter sent to the Commission signed by over 200 environmental and social groups said the merger, along with those proposed between Monsanto and Bayer, and Syngenta with ChemChina, “would exacerbate the problems caused by industrial farming, with negative consequences for the public, farmers and farm workers, consumers, the environment, and food security”.