Breaking News on Global Meat Trading and Processing

Headlines > Financial

Read more breaking news



Dow-DuPont merger wins US antitrust approval

Post a comment
Oscar Rousseau

By Oscar Rousseau+


Dow and DuPont will spin-off the merged group into three 'innovation-based' companies
Dow and DuPont will spin-off the merged group into three 'innovation-based' companies

Dow and DuPont have won approval from the competition authority in the US to complete a $130bn merger upon condition that they divest a string of assets, including chemical products used for food packaging. 

The merger can go ahead providing the chemical giants offload certain crop protection and petrochemical products that, left unsold, would have damaged competition, the US Department of Justice said on Thursday, 15 June.

Dow will sell its US acid copolymers and ionomers business – products used to manufacture flexible food packaging and other goods. Only Dow and DuPont supply these chemicals in the US and antitrust officials warned of a competition hit, harming farmers and consumers, if the business had been retained.

SK Global Chemical Company, a subsidiary of South Korean giant SK Innovation, will buy the division for an undisclosed sum.

Farmers concerned by deal

The merger was announced in 2015 and is expected to create the largest agriculture, biotechnology and seed firm in the US. As a major farm supplier, the country’s agribusiness community has raised concern about the merger, claiming farmers would face higher costs.

Roger Johnson, president of the US-based National Farmers Union, said it left farmers with “less competition and choice”, warning it would raise costs and stop other farm suppliers from competing and innovating through research and development.

This is deeply disappointing as it is this consolidation complex that has allowed for money and power to be drained from family farm operations and rural communities,” Johnson said in a statement.

What’s resulted is lost jobs, lowered wages, inflated costs, decreased economic opportunity, depleted resources and services and depopulation.

Department of Justice – the competition perspective

As originally proposed, the merger would have eliminated important competition between Dow and DuPont in the development and sale of insecticides and herbicides that are vital to American farmers who plant winter wheat and various specialty crops,” said acting assistant attorney general Andrew Finch of the US Department of Justice’s Antitrust Division. “In addition, it would have given the merged company a monopoly over ethylene derivatives known as acid copolymers and ionomers that are used to manufacture many products, including food packaging.

Despite opposition from activists, Dow and DuPont have now secured competition approval in the US, China, EU and Brazil. The merger could close as early as August 2017.

The plan is to spin the merged group off into three “innovation-based science companies,” according to Dow CEO Andrew Liveris.

Ed Breen, DuPont chief executive said the spin-offs would “unlock significant value for shareholders” as the business launches plans for each company to be “a growth-oriented leader in attractive segments.

The spin-offs of the merged group will take place within 18 months of the deal closing.

Post a comment

Comment title *
Your comment *
Your name *
Your email *

We will not publish your email on the site

I agree to Terms and Conditions

These comments have not been moderated. You are encouraged to participate with comments that are relevant to our news stories. You should not post comments that are abusive, threatening, defamatory, misleading or invasive of privacy. For the full terms and conditions for commenting see clause 7 of our Terms and Conditions ‘Participating in Online Communities’. These terms may be updated from time to time, so please read them before posting a comment. Any comment that violates these terms may be removed in its entirety as we do not edit comments. If you wish to complain about a comment please use the "REPORT ABUSE" button or contact the editors.

Related products