Dow, DuPont merger facing likely in-depth EU probe

4 August 2016. By Dafydd Nelsonk.

The European Commission has declined to seek feedback on concessions submitted by Dow Chemical and DuPont, strongly indicating that the regulator is preparing to open an in-depth probe into the companies’ plan to merge.

The US agrochemical makers submitted a package of concessions to the EU watchdog on July 20. Details of those remedies haven’t been made public.

Normally, the commission would seek feedback on commitments from customers and rivals by conducting a market test. But if an offer isn’t enough to allay the regulator’s misgivings, it won’t seek market responses to the package.

The commission hasn’t market-tested Dow and DuPont’s offer, MLex has learned. The Brussels-based regulator has until next Thursday to decide whether to open a phase II review.

Two years ago, French telecom operator Orange sought phase I approval of its plan to buy Spanish broadband provider Jazztel by offering concessions during the initial review. The commission declined to send the remedies to customers and rivals, opening an in-depth probe instead.

Dow and DuPont announced last December that they had agreed to an all-stock merger, creating a chemical producer with a market capitalization of $130 billion.

Last month, representatives of the companies met with EU merger-case handlers to discuss the agrochemical companies’ planned merger of equals. Such “state of play” meetings take place when the EU watchdog has initial misgivings about a deal’s potential impact on competition.

Both Dow and DuPont make and supply agricultural products including seeds, herbicides, fungicides and insecticides.

In February, the US Department of Justice started an in-depth review of the deal.

Proposed mergers between Dow and DuPont, ChemChina and Syngenta and, possibly, Bayer and Monsanto could reduce the number of big biotechnology players in the US and Europe from six to as few as four — those three combined companies plus BASF.

Shares in both Dow and DuPont trade on the New York Stock Exchange.

The commission’s case file number is M.7932.

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