DowDuPont merger gets conditional approval in Brazil

17 May 2017 17:09 Source:ICIS News

DowDuPont merger gets conditional approval in BrazilHOUSTON (ICIS)--Dow Chemical and DuPont have received conditional regulatory approval from authorities in Brazil for their $130bn DowDuPont merger, they said on Wednesday.

Brazil's administrative council for economic defense (CADE) approved the deal, subject to the divestment of a select portion of Dow AgroSciences' corn seed business in Brazil, including some seed processing plants and seed research centres, a copy of Dow AgroSciences' Brazilian corn germplasm bank, the Morgan brand, and a license for the use of the Dow Seeds brand for a certain period of time.

Implementation of the remedies in Brazil will maintain "the strategic logic and value creation potential of the [DowDuPont] transaction for all stakeholders", the companies said.

The divestments in Brazil are in addition to previously announced divestments of certain parts of DuPont's global crop protection portfolio and research and development (R&D) pipeline and organisation and Dow's global ethylene acrylic acid copolymers and ionomers business, in line with commitment made to regulators in the EU and other jurisdictions, they added.

Dow and DuPont continue to work with regulators in the remaining relevant jurisdictions to obtain clearance for the merger, which they are confident will be achieved, they said.

The companies continue to expect closing the merger between 1 August and 1 September, with the intended spins of agriculture, materials science and specialty products to occur within 18 months of closing, they said.

The first step of the planned separation process is expected to be the spin-off of the materials science company, "assuming such sequencing would allow for the completion of all intended spin-offs within 18 months of merger closing and would not adversely impact the value of the intended spin-offs," they added.

Dow and DuPont first disclosed their planed merger in December 2015.

By Stefan Baumgarten