Dow and Dupont merger gets EU go-ahead

Margarethe Vestager Image copyright Getty Images
Image caption Margarethe Vestager cleared Dow's merger with DuPont

The European Commission has given the go-ahead to the merger of US chemical giants Dow Chemical and DuPont.

The deal values the merged company at $130bn (£103bn) and is expected to lead to cost savings of $3bn.

The EC's approval is dependent on DuPont and Dow selling off some parts of their businesses to satisfy competition concerns.

The eventual plan is to split the merged company, DowDuPont, into three independent firms.

The three companies would focus on agriculture, materials and speciality products.

The EC had been concerned that the merger as originally proposed could have reduced price competition and choice in pesticides markets, as well as damaging innovation in new products.

Competition Commissioner Margrethe Vestager said: "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.

"Our decision today 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."

Dow said the "regulatory milestone" was a significant step towards completing the merger deal.

In addition to the cost savings, the transaction had the "potential for $1bn in growth synergies", Dow said in a statement.

"Longer term, the intended three-way split is expected to 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," it added.

To get the go-ahead from the Commission, DuPont agreed to sell off parts of its global pesticide business, including its global research and development organisation.

Dow's divestments include two manufacturing facilities for acid co-polymers in Spain and the United States.

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