European Commission authorities have given conditional approval for the merger of US-headquartered giants Dow Chemical and DuPont to merge, the two companies said on 31 March.
Deal approval in the region is contingent on the divestment of a sheaf of agrochemical assets, as well as the previously-announced sale by Dow of its ethylene acrylic acid (EAA) copolymers and ionomers businesses to SK Global Chemical.
“This regulatory milestone is a significant step toward closing the merger transaction,” Dow and DuPont said in a joint statement on the ruling.
Under the terms of European Commission approval, DuPont will be required to divest its Cereal Broadleaf Herbicides and Chewing Insecticides portfolios, as well as its crop protection research and development pipeline, excluding seed treatment, nematicides, and late-stage research programmes.
A Commission probe into the implications of the deal had been predominantly motivated by concerns over the impact of the merger on the competitiveness of agricultural markets.
The mooted agrochemical divestments by DuPont and Dow’s EAA unit sale to SK Global Chemical are contingent on the closing of the merger.
“The companies continue to work constructively with regulators in the remaining relevant jurisdictions to obtain clearance for the merger,” the companies said.
With an anticipated market capitalisation of $130bn upon completion of the merger, the deal would see the combined DowDuPont separated into three publicly-traded companies, focusing on agriculture, material sciences and specialty products respectively.