The proposed Dow-DuPont merger takes another step
The proposed merger of DuPont with Midland-based Dow Chemical took another formal step in a pivotal regulatory review today.
Getting the approval of the European Commission to the multi-billion-dollar merger is seen as a key obstacle for Dow and DuPont.
This week’s “oral hearing”gave the companies an “opportunity to present their views” to EC officials. It’s also a chance for third parties to raise objections to the merger.
According to the European Commission’s website:
The oral hearing, which is not public, takes place after the addressees of a statement of objections have submitted their written replies. It constitutes a key element of each proceeding and, in some cases, has led the Commission to change the orientation of its investigation. The opportunity for all participants to ask questions often turns the hearing into a forum for discussion on the core issues of the case.
Regulators are said to be concerned the proposed merger may reduce competition in the agri-chemical sector and end up hurting farmers. The Dow-DuPont merger is one of three mega-mergers that could reduce the number of major, global petro-chemical companies from six to three.
If the Dow-DuPont merger follows the path laid out by company officials, the merged company will eventually breakup into three smaller chemical companies. Each specializing in a different sector of the chemical market.
There are concerns the Dow-DuPont merger will result in a significant decline in spending on research and development.
Company officials have long insisted the merger will be good for consumers.
A European Commission spokesman declined to comment on the hearing only saying “The Commission investigation is ongoing, ” and that they “cannot prejudge its outcome at this stage."
The EC’s review is expected to be complete by the end of next month.
In addition to the European Commission, the proposed Dow-DuPont merger has also attracted scrutiny from other government regulators, more than a handful of states Attorneys General and the U.S. Congress.