Today, Dow and DuPont announced that the European Commission has granted a conditional regulatory clearance in Europe of what the two firms are calling the "proposed merger of equals."
In a press statement, the companies note that "this regulatory milestone is a significant step toward closing the merger transaction, with the intention so subsequently spin into three independently publically traded companies."
The merger is expected to create cost synergies of about $3 billion with the potential for $1 billion in growth synergies, according to the statement. The companies also note that in the future the three-way split would unlock "even greater value for shareholders and customers and more opportunity for employees as each company will be a leader in attractive segments where global challenges are driving demand for their distinctive offerings."
The EC approval is conditional on DuPont and Dow fulfilling commitments given in connection with the clearance. Those include DuPont divesting its Cereal Broadleaf Herbicides and Chewing Insecticide portfolios. DuPont will also divest its Crop Protection research and development pipeline and organization, excluding seed treatment, nematicides and late-stage R&D programs. Those late-stage products would continue under development and brought to market. DuPont reports it is currently in negotiations to divest the crop protection assets.
Dow also announced in early February that it had an agreement with SK Global Chemical Co. Ltd., to divest its global Ethylene Acrylic Acid 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 Ag Division of the merged company retains "strong crop protection assets, including an excellent portfolio in corn and soy broadleaf and grass control, a robust cereal weed control portfolio, DuPont's strong position in disease control, and Dow AgroSciences' industry leading insecticide portfolio," according to the statement. The companies continue to work with regulators in the remaining jurisdictions to obtain clearance for the merger.
Learn more at dowdupontunlockingvalue.com.
Source: Dow AgroSciences/DuPont