EU To Look Into Suspect Merger

EU flags waving in front of the EU Commission

The EU regulators are going to look into a suspect merger between Dow Chemical and DuPont, two of the world’s largest food, petrochemicals, and crop companies.

The EU regulators are going to look into a suspect merger between Dow Chemical and DuPont, two of the world’s largest food, petrochemicals, and crop companies.

The European Commission believes that the deal, which would lead to the creation of the world’s biggest crop protection and seeds company, could also result in hurting innovation. Some fear worse, that the company could turn into a cartel.

Many farmers depend on access to seeds and crop protection at reasonable prices.  So the Commission wants to make sure that the merger will not affect the low prices for products or lead to less innovation in this area – according to the European Competition Commissioner Margrethe Vestager.

So far, the EU Commission found that official information given by the two companies last month was not sufficient and did not alleviate concerns. Neither of the two companies nor the Commission gave details about the offer. The final decision in this matter will be issued on the 20th of December.

But Dow Chemical and DuPont said they want to collaborate with the Commission, to address the existing concern and hopefully still close the deal before the end of the year.

Both companies produce insecticides, herbicides, seeds and petrochemicals, and are leading makers of gene-manipulating technology. They also produce special packaging and adhesive applications substances, called polyolefins.

The European Commission is partnered with anti-trust authorities from the US, Brazil, and Canada because the above-mentioned companies have a world reputation and act on a global scale.

Both of the companies cited above, Dow Chemical and DuPont are cutting thousands of jobs to save billions of dollars in expenses. The two companies want to achieve three billion dollars in cost cuts after the merger.

After the fifty-fifty merger, the newly formed company is going to create separate departments for agriculture, specialized products and science and development – as of 2018.

 This merger, along with China National Chemical Corporation’s bid for Switzerland’s Syngenta and Bayer’s wish to acquisition the Monsanto Company is going to change the world’s agricultural and chemical industries.

These deals, if closed, will leave the world market with a handful of global giants that are going to offer an unprecedented range of products and services.

Image Source – Wikipedia

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