Dow Chemical Co. and DuPont Co. won European Union approval for a $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 EU approval out of a trio of mega-deals that would reshape the global agrochemicals industry. The transactions, including Bayer AG’s plan to buy Monsanto Co. and China National Chemical Corp.’s agreement to buy Syngenta AG, would whittle down six industry players to three behemoths in America, Germany and China.
Dow and DuPont still need to win approval from the U.S., where the Justice Department is also expected to require divestitures to approve the tie-up, according to a person familiar with the matter. Timing on that decision, or what assets will need to be sold, isn’t yet clear. The EU and the U.S. are in “very close contact”, EU Competition Commissioner Margrethe Vestager told reporters in Brussels on Monday. She didn’t know if the U.S. requirements “will completely match” hers.
EU approval was the biggest regulatory hurdle for the deal and the concessions required there “will likely be sufficient to appease U.S. regulators with respect to any concerns in the crop chemicals sectors,” said Jennifer Rie, an analyst for Bloomberg Intelligence in New York. “Some seed assets may need to be sold for approval, including corn and soybeans.”
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