Dow Chemical and DuPont announced on Thursday that they have reached a proposed agreement with the United States Department of Justice (DOJ) that will allow them to proceed with their planned merger.
The DOJ deal does not require additional concessions beyond those already announced to gain European Commission approval, namely the divestitures of certain DuPont crop protection assets and related R&D to FMC and Dow’s worldwide ethylene acrylic acid copolymers and ionomers business to SK Global Chemical (Seoul, South Korea).
The companies have now received clearance from the US, Europe, Brazil and China. “We are continuing to work with regulatory authorities in Mexico, Canada and a few other jurisdictions to obtain clearance for the merger, which we are confident will be achieved soon,” a DuPont spokesperson tells CW. The DOJ is the last US authority required for the deal to proceed, although the agreement is still subject to court approval.
The companies say the merger remains on track to close by August, with the split into three companies taking place within 18 months. These companies will include a materials science company, an agriculture company, and a specialty products company.
“With today’s DOJ clearance, we have taken a significant step forward in bringing together these two iconic enterprises,” says Andrew Liveris, Dow’s chairman and chief executive officer.
Upon completion of the merger, DowDuPont will have a combined market capitalization of about $130 billion and is expected to deliver about $3 billion in cost synergies, which the company says will be achieved within the first 24 months following the closing. An additional approximately $1 billion is expected from growth synergies.
First announced in December 2015, the merger was initially expected to close by the end of 2016, but has been delayed by an extended regulatory review.
Liveris will serve as executive chairman of the merged DowDuPont from the time the deal closes until 1 April 2018, and will stay on as chairman until 1 July 2018.
By Rebecca Coons
Source: Chemical Week
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