Midland-based Dow Chemical Co. and Wilmington, Del.-based DuPont today announced that the European Commission (EC) has granted conditional regulatory clearance of the companies’ proposed merger of equals.
The corporations say the approval is a significant step toward closing the merger transaction, which is intended to create three separate companies and create cost synergies of approximately $3 billion, with the potential for $1 billion in growth synergies.
The EC’s approval is conditional on both companies fulfilling certain commitments such as maintaining competition. Dow and DuPont also remain confident that they can gain approvals from other regulators in other parts of the world to obtain clearance for the merger, which they are confident will be achieved.
Specifically, DuPont will divest its Cereal Broadleaf Herbicides and Chewing Insecticides portfolios, as well as its crop protection research and development pipeline and organization, except for seed treatment, nematicides, and late-stage research and development programs, which DuPont will continue to develop and bring to market.
Personnel needed to support the programs and market the products will also remain with DuPont. The company is currently in negotiations to divest its crop protection assets.
Additionally, Dow announced in February an agreement with SK Global Chemical Co. to divest its global Ethylene Acrylic Acid copolymers and ionomers business. The divestitures are conditioned on Dow and DuPont closing their merger transaction, as well as other closing conditions, regulatory filings, and local employment law and governance.
Headquartered in Midland, Dow currently employs 56,000 people worldwide, who manufacture more than 700 products at 189 sites in 34 countries. DuPont has been a collaborative science and engineering company since 1802 and currently works with customers, governments, non-profits, and thought leaders to provide sustainable food and energy worldwide.