ACCC launches review of proposed merger between Dow, DuPont

by Holly Demaree
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MELBOURNE, VICTORIA, AUSTRALIA — The Australian Competition and Consumer Commission (ACCC) has issued a statement of issues on the proposed merger of The Dow Chemical Company (Dow) and E.l. Du Pont de Nemours and Company (DuPont).

The Dow Chemical Co. and DuPont announced plans to merge on Dec. 11, 2015. Dow and DuPont propose to merge their two companies and spin the merged entity off into three separate companies focusing on agriculture, materials science, and specialty products. The proposed merger is concurrently being reviewed by competition regulators in many other jurisdictions, including the E.U., U.S. and Canada.

ACCC chairman Rod Sims
Rod Sims, ACCC chairman.

“The ACCC is concerned about the effect that the proposed merger may have on competition for a diverse range of products, including insecticides, seeds, and materials science products,” said Rod Sims chairman of the ACCC. “The proposed merger may also reduce the competitive tension in the research and development of new crop protection products. It could therefore reduce the rate at which new products come onto the market. This is especially significant where pests have developed resistance to older chemical controls.

“In addition, Dow and DuPont’s existing products overlap in a large number of areas. Market inquiries have raised particular concerns about certain competing patented insecticides for chewing and sucking pests. These competitive overlaps are explored in detail in the Statement of Issues.”

Dow and DuPont are also both active in the research and development of new canola seed varieties, which are adapted to Australian conditions. DuPont recently sold the supply side of its seed business, but retained the research and development functions. Dow has not yet released canola seed in Australia but has announced that it will.

“The ACCC is concerned about the merger’s longterm effect on canola seed innovation in Australia,” Sims said. “The ACCC is liaising closely with overseas competition regulators, as many of these potential competition issues arise in other countries as well.”

The ACCC invites further submissions from interested parties in response to the statement of issues by Nov. 24. The ACCC’s final decision will be announced on Feb. 2, 2017.

Dow is a global diversified chemicals company that is active in plastics, chemicals, agricultural sciences, and hydrocarbon and energy products.

DuPont is a global science and technology-based company that researches, develops, produces, distributes, and sells a variety of chemical products, electronics, polymers, agro-chemicals, seeds, food ingredients, and other materials.

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