Dow-DuPont Merger Inches Toward Finish Line With Australian OK

Stay current on the latest developments from agencies including the CFPB, Federal Reserve, FDIC, and OCC to advise clients on real-life regulatory situations.

By Eleanor Tyler

DuPont Co. and the Dow Chemical Co. are one step closer to closing their $78.5 billion merger after Australia cleared the deal on June 8, but they still face three important hurdles.

The deal is still being weighed by a few major merger review authorities — the U.S. Justice Department, India, and Canada. The tie-up is the first stage in a planned division of the combined Dow-DuPont business into three separate companies in agriculture, materials science, and specialty products.

Under the companies’ agreement, the deadline to complete the merger is Aug. 31. Dow’s Director of Public Affairs, Rachelle Schikorra, confirmed to Bloomberg BNA that companies expect the merger is on track to close in August with the intended spin-offs completed 18 months thereafter.

Australia opened an in-depth investigation into the merger and published a statement of issues in November. In the ensuing months, however, the Australian Competition and Consumer Commission (ACCC) concluded that the divestitures Dow and DuPont had already agreed to undertake will solve the agency’s concerns about Australian markets. The ACCC cleared the deal with no additional conditions.

“The ACCC considers that these competition concerns will be addressed by the global divestments and, subject to those occurring, will not oppose the merger in Australia,” said ACCC Commissioner Mick Keogh.

Last Big Hurdles

The remaining jurisdictions to clear the merger are important markets for the companies. According to Dow and DuPont’s public notice on their deal, the companies overlap in agrochemicals, corn seeds, and several materials products in India. The deadline for public comment in India was April 10. Following public comment, the Competition Commission of India as a standard operating procedure asks for information from the parties and must generally reach a final determination 45 days after it receives the companies’ submissions.

Because the process in the U.S. and Canada is confidential, information on where the companies stand in those merger reviews is unavailable. Canada’s antitrust agency publicly announces its merger decisions on a monthly basis only, but a spokeswoman confirmed that the bureau is still reviewing the merger.

The deal has already cleared several other barriers. China and Brazil approved the merger conditioned on divestitures in May, and the European Commission cleared it with substantial divestiture requirements in March, including the sale of major parts of Dupont’s global pesticide business. Shareholder votes on the deal, announced in December 2015, passed in June 2016.

To contact the reporter on this story: Eleanor Tyler in Washington at etyler@bna.com

To contact the editor responsible for this story: Fawn Johnson at fjohnson@bna.com

Copyright © 2017 The Bureau of National Affairs, Inc. All Rights Reserved.

Request Antitrust on Bloomberg Law