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US Approves $130B Dow-DuPont Merger

Monday, June 19, 2017

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U.S. regulators have given conditional approval to the pending $130 billion merger between chemical giants The Dow Chemical Company and DuPont.

The Department of Justice and Federal Trade Commission announced Thursday (June 15) that they had approved the transaction on the condition that each company make some divestitures. Dow will be required to sell its acid copolymers and ionomers business, while DuPont must divest of its Finesse and Rynaxypyr lines of pesticides. The companies expect the deal to close in August.

Divestiture Sales

Dow announced in February that it plans to sell its Ethylene Acrylic Acid copolymers and ionomers business to SK Global Chemical Co. Ltd. The DOJ says Dow and DuPont are the country’s only suppliers of acid copolymers and ionomers, which are used in consumer product packaging and industrial applications such as metalized building panels. Seoul-based SK is a manufacturer of olefins, aromatics, performance chemicals and polymers, as well as synthetic rubber.

Dow Chemical
Dow Chemical

Dow plans to sell its Ethylene Acrylic Acid copolymers and ionomers business to SK Global Chemical Co. Ltd.

In March, DuPont entered into an agreement with FMC Corporation for the sale of a portion of its Crop Protection business in an effort to gain approval for the merger with Dow. In that deal, DuPont will acquire FMC’s Health and Nutrition business and receive $1.2 billion cash from FMC in exchange for what FMC calls “a significant portion” of DuPont’s Crop Protection business.

“The remedies obtained by today’s settlement, including the divestiture of DuPont’s market-leading Finesse and Rynaxypyr crop protection products, will preserve vigorous competition in the sale of these products and benefit American farmers and consumers alike,” said Acting Assistant Attorney General Andrew Finch, of the Antitrust Division.

“We are very pleased that the DOJ has approved this transaction,” said Andrew Liveris, Dow's chairman and chief executive officer. "With today’s DOJ clearance, we have taken a significant step forward in bringing together these two iconic enterprises, and in the subsequent intended separation into three leading, independent innovation-based science companies that will generate significant benefits for all stakeholders."

Other Approvals

The Dow-DuPont merger cleared European regulators in March, contingent on largely the same divestitures: Dow’s EAA copolymers and ionomers, and a portion of DuPont’s pesticides business. The deal has also met with approval in other countries, including China and Brazil.

Breen and Liveris
DuPont

DuPont CEO Edward Breen (left) and Dow CEO Andrew Liveris (right) announced the $130 billion deal in December 2015.

According to Reuters, countries that have yet to approve the merger include Mexico and Canada.

Merger and Breakup

Announced in 2015, the merger will create one company, DowDuPont, with DuPont CEO Edward Breen serving as CEO and Dow CEO Andrew Liveris filling the role of executive chairman. The new company will, within 18 months, split into three separate companies. Each of the new companies will concentrate on one main business segment.

The Material Science Company will include DuPoint’s Performance Materials segment along with Dow’s Performance Plastics, Performance Materials and Chemicals, Infrastructure Solutions and Consumer Solutions. These businesses include the companies’ coatings-related unit, such as Dow Polyurethanes and Dow Coating Solutions.

The Specialty Products Company will encompass DuPont’s Nutrition and Health, Industrial Biosciences, Safety and Protection, and Electronics and Communication segments, as well as Dow’s Electronic Materials.

The Agriculture Company will include both companies’ seed and crop protection businesses.

   

Tagged categories: Acquisitions; Business matters; Coatings raw materials manufacturers; Dow Chemical Company; DuPont; Government; Mergers

Comment from Robert Tinker, (6/19/2017, 7:08 AM)

An abomination in the age of Trump. Soon to be over!


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