European Union antitrust regulators clear $130 bln Dow, DuPont merger

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"Our job, as a competition authority, is to make sure a merger doesn't deny Europeans the benefits of competition", said EU competition commissioner, Margrethe Vestager.

The companies said they are continuing to work constructively with regulators in the remaining relevant jurisdictions to obtain clearance for the amalgamation.

Vestager said the concessions are "insufficient to clearly dismiss its serious doubts" about whether the merger will stifle innovation and competition throughout the European Union. The mergers are a marriage made in hell and should be blocked by regulators.

"The sale also includes a number of new products that DuPont is developing, and its worldwide research and development organization for pesticides".

In return for the European Union green light, DuPont will sell large parts of its global pesticides business, including its global research and development organization.

The EC's approval is dependent on DuPont and Dow selling off some parts of their businesses to satisfy competition concerns.

On February 2, Dow announced an agreement with SK Global Chemical Co., LTD.to divest its global ethylene acrylic acid copolymers and ionomers business.

DuPont and Dow said in a statement: "The companies believe the outcome of the EC review is pro-competitive and maintains the strategic logic and value creation potential of the transaction".

The European Commission had been skeptical of the deal, anxious that it would stifle competition and reduce innovation in the agriculture sector.

"Effective competition in this sector allows farmers to choose from a range of products at affordable prices".

Now that Dow and DuPont have cleared the first major hurdle, other countries are expected to follow suit.

Friends of the Earth Europe, a lobbying group, say that the DuPont and Dow merger could lead to the three new companies controlling 70% of the world's agrichemicals and over 60% of commercial seeds.

As regards insecticides, the transaction would have significantly reduced competition for products controlling for chewing insect and sucking insect in fruits and vegetables and some other crops in a number of Member States in particular in the South of Europe.

"Both companies have a number of similar projects under way to develop new products". Of course they will remain just as strict after this merger as before it. USA regulators are still inspecting the merger closely, and may required additional actions from the two companies to satisfy a bevy of antitrust concerns.

"We've now got remedies that focus on the brains behind things, not just what's being created", Jacques Derenne, a lawyer at Sheppard, Mullin, Richter & Hampton in Brussels, said in an interview. "We understand that this is a big change for the industry, that there are a lot of moving parts, that the regulators need to make very informed decisions".

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