China has become the second major trading bloc to conditionally approve the proposed $130 merger of US chemical giants Dow and DuPont. The green light from the Ministry of Commerce (MOFCOM) is being touted as a step forward for the deal that has been faced with significant regulatory hurdles.

The European Commission waved off on the merger in March, while requiring that the companies divest a number of assets and R&D facilities. Regulatory approvals from the US, Brazil, Australia and Canada are still outstanding.

In exchange for its blessing, China attached strings on the deal similar to those attached by the EU, mandating that the combined company divest DuPont's research and development organization as well as assets related to pesticides and herbicides used in rice, including metsulfuron-methyl, azimsulfuron, cyantraniliprole and chlorantraniliprole and indoxacarb.

Additionally, Dow and DuPont said they have made commitments related to the supply and distribution in China of certain herbicide and insecticide ingredients and formulations for rice crops for five years after the closing of the proposed merger.

To meet the EU conditions, the combined company trading as DowDuPont before splitting into three parts, will divest some of DuPont's crop protection portfolio and its R&D development pipeline, along with Dow's global Ethylene Acrylic Acid (EEA) copolymers and ionomers business.

China is a critical market for both Dow and DuPont and will be for the three intended independent companies that will be created following the merger, the US groups said.

In mid-April, MOFCOM approved the planned $43 billion takeover of Switzerland-based agrochemicals group. No conditions were attached, according to Syngenta. This deal is expected to be completed in the second quarter of this year, subject to approval by India, which has said it has competition concerns.