Brussels | Reuters — Dow Chemical and DuPont are set to win EU antitrust approval for their US$130 billion merger, two people familiar with the matter said on Wednesday.
The deal, which still needs approval from U.S. and other regulators, has faced intense scrutiny from the European Commission. Of particular concern is combining the two companies’ agricultural businesses which sell seeds and crop protection chemicals, including insecticides and pesticides.
The EU competition enforcer had expressed concerns about whether the merged company would still be incentivized to produce new herbicides and pesticides in the future.
This month, DuPont offered to sell a portion of its crop protection business and related research and development, while Dow agreed to sell its acid copolymers and ionomers business to South Korea’s SK Innovation if the merger goes ahead.
The companies fine-tuned their concessions after the Commission received feedback from rivals and customers last week.
“These were very minor tweaks,” one of the people said.
The Commission will not seek third parties’ views on the changes, a clear sign that it will approve the deal, the source said.
The Commission, which is scheduled to rule on the merger by April 4, declined to comment. Dow and DuPont did not immediately respond to a request for comment.
Dow and DuPont shares added gains in New York after the Reuters story. Dow was trading 3.8 per cent higher at $63.54 and DuPont was up 3.8 per cent at $80 (all figures US$).
The other two big deals pending in the sector are ChemChina’s $43 billion bid for Swiss pesticides and seeds group Syngenta, and German drugs and pesticides maker Bayer’s $66 billion deal to take over U.S. seeds giant Monsanto.
Sources have told Reuters that the European Commission is expected to give the green light to the ChemChina deal, the largest foreign acquisition by a Chinese company.
— Foo Yun Chee is a senior Reuters correspondent covering competition cases from Brussels.