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May 3, 2017

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China approves Dow-DuPont merger

CHINA has decided to greenlight the merger of chemical giants Dow Chemical and DuPont after nearly a year of antitrust investigations, but asked the two to divest some businesses as preconditions of the approval.

The Ministry of Commerce said yesterday in a statement that the merger will boost their market shares for some chemicals and limit competition in the Chinese market and beyond.

The two companies’ dominance in pesticides, weed killer and several other products will likely increase after the consolidation of their marketing power and R&D division, which will dampen the rise of competitors, negatively impact technological advancement, and hurt downstream dealers.

The ministry believes the post-merger conglomerate will control nearly 40 percent of China’s weed killer market, 75 percent for acid copolymers and 100 percent for ionomers. The proportions are similar globally.

Businesses, assets and R&D facilities of those products should be divested, and the new company should ensure supply in reasonable prices in China in the next five years, according to the statement.

The Dow-DuPont merger was also approved by the European Union on similar conditions in March.


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