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European Commission approved Dow/DuPont merger

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Agrochemicals Market-Mergers & Acquisitions - Global Trends (2000-2016) and Outlook-by Deal Type (Acquisitions, Agreements, Divestitures, Mergers & Others), by Segment (Crop-Protection Chemicals, Herbicides, Fungicides, Insecticides & Others), and by Region

DuPont and Dow Chemical announced that the European Commission (EC) has granted conditional regulatory clearance in Europe of the companies' proposed merger of equals.

This regulatory milestone is a significant step toward closing the merger transaction, with the intention to subsequently spin into three independent publicly traded companies. The transaction is expected to create significant cost synergies of approximately $3 billion with the potential for $1 billion in growth synergies. Longer term, the intended three-way split is expected to unlock even greater value for shareholders and customers and more opportunity for employees as each company will be a leader in attractive segments where global challenges are driving demand for their distinctive offerings.

The EC's approval is conditional on DuPont and Dow fulfilling commitments given to the EC in connection with the clearance. The companies believe the outcome of the EC review is pro-competitive and maintains the strategic logic and value creation potential of the transaction.

Specifically, DuPont will divest its Cereal Broadleaf Herbicides and Chewing Insecticides portfolios. DuPont will also divest its Crop Protection research and development pipeline and organization, excluding seed treatment, nematicides, and late-stage R&D programs, which DuPont will continue to develop and bring to market, and excluding personnel needed to support marketed products and R&D programs that will remain with DuPont. DuPont is currently in negotiations to divest the crop protection assets.

Additionally, on February 2, 2017, Dow announced an agreement with SK Global Chemical Co., LTD. to divest its global Ethylene Acrylic Acid (EAA) copolymers and ionomers business. These divestitures are conditioned on Dow and DuPont closing their merger transaction, in addition to other closing conditions, including regulatory filings, local employment law and governance.

Following the divestiture of a portion of DuPont's crop protection business, the Agriculture Division of the merged company will retain strong crop protection assets, including an excellent portfolio in corn and soy broadleaf and grass control, a robust cereal weed control portfolio, DuPont's strong position in disease control, and Dow AgroSciences' industry leading insecticide portfolio. The Agriculture division will be well positioned to accelerate growth, leveraging strong pipelines in both seeds and chemistry to better serve growers around the world with a superior portfolio of innovative solutions, greater choice, and competitive price for value.

The companies continue to work constructively with regulators in the remaining relevant jurisdictions to obtain clearance for the merger, which they are confident will be achieved.