DuPont and Dow Chemical Co will have to sell certain crop protection products and other assets, and this is the condition that the companies have been given as they have won U.S. antitrust approval to merge, according to a court filing.
In a deal that they struck with European regulators in March the companies had agreed to give up similar amounts of assets through sales that are required by U.S. antitrust enforcers. But saying that farmers would face higher costs, the antitrust approval was quickly denounced by the head of the National Farmers Union and the deal is one of several big mergers by farm suppliers.
The asset sales would prevent price hikes or lost innovation, the Justice Department said.
In what was billed as an all-stock merger valued at $130 billion, Dow and DuPont announced the deal in December 2015.
DuPont's Finesse herbicide for winter wheat and Rynaxypyr insecticides, which the Justice Department said had U.S. annual sales of more than $100 million are part of the assets to be sold, according to the filing in U.S. District Court for the District of Columbia.
The U.S. acid copolymers and ionomers business of Dow would also be sold in addition to the above. Food packaging and other goods are made from the product.
The antitrust approval was called "deeply disappointing" by the president of the National Farmers Union, Roger Johnson.
"Clearly, the Trump administration is content allowing our country’s consolidation complex to continue," Johnson said in a statement. "The combination of Dow and DuPont, coupled with other pending mergers, ... drives up costs for farmers’ inputs, and it reduces the incentive for the remaining agricultural input giants to compete."
No fewer than four deals involving corporate titans that supply U.S. farmers are being reviewed or have been reviewed by the Justice Department and Federal Trade Commission, which share the work of antitrust enforcement.
ChemChina is purchasing Syngenta and Bayer has a deal to buy Monsanto, in addition to Dow and DuPont merger deal. Plans for a merge rare being made by fertilizer companies Potash Corp and Agrium, in addition.
three separate companies specializing in material sciences, specialty products, and seeds and agrochemicals, would be formed after Dow completes the merger with DuPont, the companies have said.
"As originally proposed, the merger would have eliminated important competition between Dow and DuPont in the development and sale of insecticides and herbicides that are vital to American farmers who plant winter wheat and various specialty crops," acting Assistant Attorney General Andrew Finch said in a statement. A monopoly over ethylene derivatives used to manufacture food packaging and other products would also be gained by the merged company, Finch added.
The settlement "will preserve vigorous competition," Finch said.
another round of consolidation in the agricultural supply business in the near future is not foreseen by Analyst Brett Wong of Piper Jaffrey Co. "It's going to take some time for the current dust to settle," he said.
clearance to merge from Europe, China and Brazil has already been received by Dow and DuPont. Approval from a handful of countries, including Canada and Mexico, is now awaited by the companies.
(Source:www.reuters.com)
In a deal that they struck with European regulators in March the companies had agreed to give up similar amounts of assets through sales that are required by U.S. antitrust enforcers. But saying that farmers would face higher costs, the antitrust approval was quickly denounced by the head of the National Farmers Union and the deal is one of several big mergers by farm suppliers.
The asset sales would prevent price hikes or lost innovation, the Justice Department said.
In what was billed as an all-stock merger valued at $130 billion, Dow and DuPont announced the deal in December 2015.
DuPont's Finesse herbicide for winter wheat and Rynaxypyr insecticides, which the Justice Department said had U.S. annual sales of more than $100 million are part of the assets to be sold, according to the filing in U.S. District Court for the District of Columbia.
The U.S. acid copolymers and ionomers business of Dow would also be sold in addition to the above. Food packaging and other goods are made from the product.
The antitrust approval was called "deeply disappointing" by the president of the National Farmers Union, Roger Johnson.
"Clearly, the Trump administration is content allowing our country’s consolidation complex to continue," Johnson said in a statement. "The combination of Dow and DuPont, coupled with other pending mergers, ... drives up costs for farmers’ inputs, and it reduces the incentive for the remaining agricultural input giants to compete."
No fewer than four deals involving corporate titans that supply U.S. farmers are being reviewed or have been reviewed by the Justice Department and Federal Trade Commission, which share the work of antitrust enforcement.
ChemChina is purchasing Syngenta and Bayer has a deal to buy Monsanto, in addition to Dow and DuPont merger deal. Plans for a merge rare being made by fertilizer companies Potash Corp and Agrium, in addition.
three separate companies specializing in material sciences, specialty products, and seeds and agrochemicals, would be formed after Dow completes the merger with DuPont, the companies have said.
"As originally proposed, the merger would have eliminated important competition between Dow and DuPont in the development and sale of insecticides and herbicides that are vital to American farmers who plant winter wheat and various specialty crops," acting Assistant Attorney General Andrew Finch said in a statement. A monopoly over ethylene derivatives used to manufacture food packaging and other products would also be gained by the merged company, Finch added.
The settlement "will preserve vigorous competition," Finch said.
another round of consolidation in the agricultural supply business in the near future is not foreseen by Analyst Brett Wong of Piper Jaffrey Co. "It's going to take some time for the current dust to settle," he said.
clearance to merge from Europe, China and Brazil has already been received by Dow and DuPont. Approval from a handful of countries, including Canada and Mexico, is now awaited by the companies.
(Source:www.reuters.com)