“The livelihood of farmers depends on access to seeds and crop protection at competitive prices,” said Margrethe Vestager, commissioner of the European Commission. “We need to make sure that the proposed merger does not lead to higher prices or less innovation for these products.”
The two U.S.-based companies first announced plans to merge in December 2015, and last month received the go-ahead from stockholders of both companies.
The Commission, though, said certain commitments submitted by Dow and DuPont to address some of the Commission’s preliminary concerns were “insufficient to clearly dismiss its serious doubts as to the transaction’s compatibility with the E.U. Merger Regulation.”
One of the Commission’s preliminary concerns has to do with seeds, and the agency reiterated its stance in the Aug. 11 statement.
“Dow and DuPont both develop so-called ‘gene editing’ technologies that could be used to materially accelerate the breeding of new seed varieties,” the European Commission said. “The Commission has preliminary concerns that, after the proposed transaction, the companies may have fewer incentives to license these technologies to competitors or may make the development of competing technologies more difficult.
“The merged entity would hold both a broad portfolio of crop protection products and one of the leading global market positions in seeds, making it the largest integrated company in the industry. The Commission is investigating whether competitors’ access to distributors of crop protection products and seeds could become more difficult if Dow and DuPont were to tie their sales of crop protection products and seeds.”
The Commission said it has 90 working days, until Dec. 20, 2016, to make a decision on the proposed merger.