European commission probes competition implications of the planned mega-merger
The European commission has launched an investigation into the competitive implications of the proposed merger between US chemical giants Dow and DuPont. The commission will investigate whether the deal could reduce competition in areas like crop protection, seeds and petrochemicals.
The planned $130 billion (£100 billion) merger would create the world’s largest integrated crop protection and seeds company, and it would establish one leading producer of certain petrochemical products used extensively in packaging and adhesives. ‘We need to make sure that the proposed merger does not lead to higher prices or less innovation for these products,’ said Margrethe Vestager, the EU Commissioner in charge of competition policy.
An initial market investigation has led the commission to worry that the combination of Dow and DuPont’s strong herbicides and insecticides portfolios could adversely affect price, quality, choice and innovation in the crop protection field.
‘Dow and DuPont are important innovators in the crop protection industry, which is characterised by a limited number of global companies with significant R&D capabilities,’ the commission explained in a statement. ‘The transaction would lead to the elimination of one of the few companies able to develop and launch new active ingredients.’
The commission – which is working closely with other worldwide agencies like the US Department of Justice and the competition authorities of Brazil and Canada – has until 20 December to make a decision on the deal. Dow and DuPont continue to argue the merger is ‘procompetitive and good for customers and consumers’.