Minority report

29 March 2017 By Robert Cyran Follow @rob_cyran

European regulators will let DuPont and Dow merge, but first they must divest DuPont’s labs. The goal is to ensure future pesticides make it to market. It’s a logical consequence of technology’s importance, but Brussels struggles to preserve competition today, much less tomorrow.

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On March 27, the European Commission approved the $130 billion merger of Dow Chemical and DuPont. To obtain approval, DuPont will divest large parts of its global herbicide and pesticide business as well as related research and development operations. The decision excludes seed treatment, nematicides, and late-stage R&D programs, which DuPont will continue to develop and bring to market.

Dow will sell to SK Innovation its Ethylene Acrylic Acid copolymers and ionomers business in Spain and the United States.

The companies think the combination will generate $3 billion of cost savings and $1 billion in new sales annually.

“We need to ensure that a merger does not lead to higher prices for existing products or reduce choice,” Competition Commissioner Margrethe Vestager said in a statement. “But it is just as important to ensure that it does not reduce innovation for new and better products.”

The deal has yet to receive regulatory approval in Brazil, Canada, China, and the United States.

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