Dow officials say the Phase II review is a “common next step in the review process for a transaction of this size and scope under EU Merger Regulation”, and generally allows the commission 90 working days to review the pending transaction.
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The EU on Thursday launched an investigation into the merger of U.S. agri-chemicals giants Dow Chemical and DuPont to see if one of the world’s largest tie-ups will reduce competition and harm customers. “We need to make sure that the proposed merger does not lead to higher prices or less innovation for these products”, said European competition commissioner Margrethe Vestager.
The European Commission said it would probe whether the deal would cut competition in areas such as crop protection, seeds and certain petrochemicals.
In seeds, the Commission expressed a worry that a merger would reduce incentives to license so-called “gene editing” technologies that could be used to materially accelerate the breeding of new seed varieties to competitors or may make the development of competing technologies more hard.
Dow Chemical and DuPont, two of the oldest United States companies, announced the tie-up in December to create the world’s biggest chemical and materials group valued at $130 billion.
“The overwhelming support of Dow and DuPont stockholders to approve this historic merger transaction is a clear testament to the compelling value proposition and enhanced shareholder value that DowDuPont represents”, Andrew N. Liveris, Dow’s chairman and CEO, said in a statement issued at the time.
DuPont and Dow on Thursday said they had expected “a thorough review” by regulators, but were still confident about the deal closing by the end of the year.
Vestager has until December to make a decision about the deal. Dow and DuPont notified China’s competition agency of the deal in May and filed with the European Union for approval in June.
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“Of course, (antitrust regulators) look to the market, but they don’t have an industry approach in their merger reviews, they have to develop a targeted approach”, said Ioannis Lianos, a professor of global competition law at University College London.
