DowDuPont Wins Conditional Approval in Brazil
The board of Brazilian competition authority Administrative Council for Economic Defense (CADE) has approved the planned $130 million merger of US chemical giants Dow Chemical and DuPont, subject to a global and local divestment schedule.
Reports from Brazil said the board unanimously approved the recommendation of its technical staff that the proposed asset sales would be sufficient to address competitive concerns about the merger.
Assets foreseen to be divested include Dow AgroSciences' corn seed business in Brazil, several seed processing plants, a seed research center, a copy of its Brazilian corn germplasm bank, the Morgan brand and a license for the use of the Dow Seeds brand for a certain period.
The local remedy is in addition to international commitments already made to the European Commission and regulatory agencies in other jurisdictions. These include the sale of certain parts of DuPont's global crop protection portfolio and R&D pipeline and organization, along with Dow’s global Ethylene Acrylic Acid copolymers (EAA) and ionomers business.
Dow and DuPont said they continue to work “constructively” with regulators in the remaining relevant jurisdictions to obtain clearance for the merger and are still intent on finalizing the transaction between Aug. 1 and Sept. 1, 2017.
The spin-offs are due to take place within 18 months of closing. In this respect, the companies said the first unit due to be separated from the merged DowDuPont will be the materials unit with pro forma annual sales of $51 billion. This, they said, assumes that completion of all intended spin-offs could take place within 18 months of merger closing and would not adversely impact the value of the spun-off businesses
The other two envisioned spin-off are agriculture with pro forma annual sales of $19 billion and specialty products with sales of $13 billion.
