DuPont and Dow Chemical Company announced that they have reached a proposed agreement with the Antitrust Division of the United States Department of Justice that will permit the companies to proceed with their merger.
The OK, while long in coming, had long been expected as the companies made concessions with regulators in other nations.
Ed Breen, CEO of DuPont, said, “With this review completed, we are on track to close our procompetitive merger in a manner that maintains the strategic logic and value creation potential of the transaction. Going forward, the intended subsequent spin-offs are expected to unlock significant value for shareholders, as we execute our plan for each company to be a growth-oriented leader in attractive segments where global challenges are generating strong demand for their distinctive offerings.”
In connection with the proposed agreement and consistent with commitments already made to obtain the European Commission’s regulatory approval, DuPont will divest certain parts of its crop protection portfolio and Dow will divest its global Ethylene Acrylic Acid copolymers and ionomers business. The proposed agreement with the DOJ, which remains subject to court approval, does not require the companies to make any additional divestitures. With this agreement, no further approvals are required in the U.S. for the merger to close.
The proposed agreement with the DOJ, which remains subject to court approval, does not require the companies to make any additional divestitures. With this agreement, no further approvals are required in the U.S.
The companies again noted that the merger transaction is expected to generate cost savings of about $3 billion and growth synergies of approximately $1 billion.
Dow and DuPont have obtained clearance in many jurisdictions, including approvals in the U.S., Europe, Brazil, and China. The companies are working constructively with regulators in the remaining jurisdictions to obtain clearance for the merger and are making progress in fulfilling the requirements of the conditional approvals that have already been received.
The companies are working with regulators in the remaining jurisdictions to obtain clearance for the merger and reported progress in fulfilling the requirements of the conditional approvals that have already been received.
The companies still plan to close the merger in August 2017, with the intended spin-offs to occur within 18 months of closing. Two of the three spin-offs, including the key agriculture business, will be headquartered in Delaware
There have been demands that the companies should spin off more businesses to sweeten the pot for stockholders.
