Dow Chemical, DuPont Submit Antitrust Remedies to EU -- 2nd Update
February 08 2017 - 7:14AM
Dow Jones News
By Natalia Drozdiak
BRUSSELS-- Dow Chemical Co. and DuPont Co. have offered to sell
businesses to gain approval from the European Union's antitrust
watchdog for their tie-up, a Dow spokeswoman said Wednesday.
The merger, announced in December 2015, would unite the two
giants, creating a business with a combined market capitalization
of roughly $120 billion, before splitting into three separate
companies.
It has faced delays as antitrust regulators sought reams of
information concerning the companies' competing businesses in
insecticides, weedkillers and crop seeds. Dow and DuPont initially
expected their deal to close late last year.
They now expect it to close in the first of half of this year,
with the intended spin-offs taking place about 18 months later, the
spokeswoman said.
As part of their remedy package submitted to the EU on Tuesday,
the companies have offered to dispose of a portion of DuPont's crop
protection business and associated research and development, as
well as Dow's acid copolymers and ionomers business, the
spokeswoman said.
"We have submitted a remedy package to the European Commission
that maintains the strategic logic and value creation potential of
the transaction for all stakeholders," the Dow spokeswoman said,
adding that the companies were confident they would obtain
clearance in all relevant jurisdictions.
The European Commission, the bloc's competition regulator,
confirmed it had received the suggested remedies and that the
deadline to conclude the review into the merger had been extended
until April 4.
Asked Wednesday whether the package addresses the commission's
concerns, EU antitrust chief Margrethe Vestager said she wouldn't
take any final decisions before hearing the views of other market
participants on the remedy package, known as a "market test."
"We will be market testing and in this case it is a signal that
we think it is worthwhile market testing and that these remedies
might work," Ms. Vestager said.
The companies had offered concessions last July, but the
commission said those were "insufficient to clearly dismiss its
serious doubts" about the merger. The EU opened an in-depth probe
into the deal last August.
European regulators have focused on the deal's impact on the
agricultural industry, losing a robust player with important
research capabilities.
Dow and DuPont executives said in recent weeks their EU remedy
package would involve some research and development commitments and
potential divestitures in the companies' pesticide operations.
The commission is weighing the Dow-DuPont merger alongside other
deals in the industry, including between China National Chemical
Corp. and Syngenta AG and Bayer AG and Monsanto Co.
The combined company would have about $90 billion in total
revenue, based on 2014 numbers, and products ranging from corn
seeds to Kevlar fiber to foam chemicals used in sneaker soles. That
behemoth would serve as a vehicle for cutting some $3 billion in
costs before splitting into three separate businesses 18 to 24
months after the merger closes. Those companies, each to be
publicly traded, would focus on agriculture, material sciences and
specialty products in nutrition and electronics.
Jacob Bunge
contributed to this article.
Write to Natalia Drozdiak at natalia.drozdiak@wsj.com
(END) Dow Jones Newswires
February 08, 2017 06:59 ET (11:59 GMT)
Copyright (c) 2017 Dow Jones & Company, Inc.
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