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    Dow-DuPont deal wins conditional antitrust approval from EU

    BRUSSELS — Dow Chemical Co. and DuPont Co. won European Union approval for a $77 billion merger, overcoming regulators’ concerns with hefty concessions, including the sale of large parts of DuPont’s global pesticide business.

    The takeover, announced a year ago, is the first to win EU approval out of a trio of mega-deals that would reshape the global agrochemicals industry. The transactions, including Bayer AG’s plan to buy Monsanto Co. and China National Chemical Corp.’s agreement to buy Syngenta AG, would whittle down six industry players to three behemoths in America, Germany, and China.

    Dow and DuPont still need to win approval from the United States, where the Justice Department is also expected to require divestitures to approve the tie-up, according to a person familiar with the matter. Timing on that decision, or what assets will need to be sold, isn’t yet clear. The EU and the US are in “very close contact,” EU Competition Commissioner Margrethe Vestager told reporters in Brussels on Monday. She didn’t know if the US requirements “will completely match” hers.


    EU approval was the biggest regulatory hurdle for the deal and the concessions required there “will likely be sufficient to appease US regulators with respect to any concerns in the crop chemicals sectors,” said Jennifer Rie, an analyst for Bloomberg Intelligence in New York. “Some seed assets may need to be sold for approval, including corn and soybeans.”

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    The EU said the combination could have halted work on new chemical products in areas where Dow and DuPont currently compete head-to-head. There was “specific evidence” that the pair would have cut back on the amount they spent on developing products, the European Commission said in an emailed statement. Only Bayer AG, BASF SE, and Syngenta match the two firms in discovering, developing, and selling agrochemicals.

    “We always look at what a merger would change not just today but also tomorrow,” Vestager said. “It is just as important to make sure” mergers don’t “reduce innovation for new and better products.”

    DuPont has agreed to divest “a significant part” of its existing pesticide business, including R&D activities. That covers herbicides for cereals, oilseed rape, sunflower, rice, and pasture as well as insecticides used for fruit and vegetables. The sale includes plants where the products are made and relevant personnel. DuPont’s “global R&D organization” will mostly be sold too. Dow will sell two plants in Spain and the United States that make acid co-polymers.

    “This regulatory milestone is a significant step toward closing the merger transaction, with the intention to subsequently spin into three independent publicly traded companies,” Dow and DuPont said in a joint statement. The concessions to the EU still ensure “the strategic logic and value creation potential of the transaction,” they said.


    Vestager said the choice of buyer for their assets was up to Dow and DuPont but that a potential purchaser would need to have the necessary resources to make the new business viable without triggering new antitrust concerns.

    “It’s not easy to find buyers of this sort,” she said. It “remains to be seen who they choose.”

    BASF SE attended a closed-door hearing with regulators on the deal earlier this year, which may show its interest in acquiring assets sold by Dow and DuPont. FMC Corp. and American Vanguard Corp. have said they might want to pick up businesses sold by others in the current merger wave.

    ChemChina and Syngenta have an April 12 deadline for an EU decision, and the companies have also made concessions to try to win over regulators. Bayer plans to file for EU approval of the $66 billion purchase in the second quarter after regulators sought more information.