EU clears transactions related to Dow/DuPont merger

Approval progresses Dow/DuPont merger closer to closure.

The European Commission announced July 27 that it has conditionally approved, under the European Union's Merger Regulation, FMC's proposed acquisition of parts of DuPont's crop protection business and DuPont's acquisition of FMC's Health & Nutrition business. Both transactions are related to the Dow/DuPont merger divestment commitments made when the European Commission conditionally approved the merger in March 2017.

“DuPont committed to divest major parts of its global crop protection business, including its global research and development organization, which FMC now acquires. As part of the deal to acquire these parts of DuPont's crop protection business, FMC is selling its Health & Nutrition business to DuPont,” the commission said.

Clearance of FMC's acquisition of DuPont's crop protection business is conditional on FMC divesting its sulfonylurea and florasulam businesses in the European Economic Area (EEA). Sulfonylureas and florasulam are herbicides used to control broadleaf weeds in cereal crops.

The commission said it had concerns that the transaction, as originally notified, would have allowed FMC to unilaterally raise prices in a number of national markets in the EEA by eliminating a close competitor, i.e., DuPont. “This would have been the case for products to control broadleaf weeds once crop seedlings have emerged (post-emergence control) in cereals. The commitments offered by FMC address these concerns,” the European Commission explained.

FMC offered to divest its sulfonylurea and florasulam businesses in the EEA through exclusive licenses to thifensulfuron-ethyl, tribenuron-ethyl, metsulfuron-ethyl and florasulam — including mixtures with other active ingredients — and the necessary personnel to run these businesses.

Clearance of DuPont's acquisition of the FMC Health & Nutrition business is conditional upon the divestment of DuPont's global alginates business. Alginates are used as stabilizing, thickening or gelling agents in food and pharmaceutical products.

The commission said it had concerns that the transaction, as originally notified, would have strengthened FMC's dominant position on alginates for use as pharmaceutical excipients and would have significantly reduced competition for food applications by eliminating an important competitor (FMC) in the EEA market; the commitments offered by DuPont address these concerns.

DuPont offered to divest its global alginates business, including all tangible and intangible assets for the sourcing, development, manufacturing, packaging or sale of alginates. This includes its manufacturing plant in Landerneau, France, a license to use its GRINSTED Alginate brand for a certain period of time, as well as DuPont's pectin-alginates mixtures.

In view of the remedies proposed in each of these transactions, the European Commission concluded that, as modified, the proposed transactions would not significantly impede effective competition in the EEA. Both decisions are conditional upon full compliance with the respective commitments.

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