Dow DuPont
The two companies first announced plans to merge in December 2015.

BRUSSELS, BELGIUM — The European Commission on March 27 cleared the proposed merger between The Dow Chemical Co. and E.I. du Pont de Nemours and Co., conditional on the divestiture of major parts of DuPont’s global pesticide business, including its global R.&D. organization.

Margrethe Vestager, European Commission
Margrethe Vestager, commissioner of the European Commission

“Pesticides are products that matter — to farmers, consumers and the environment,” said Margrethe Vestager, commissioner of the European Commission. “We need effective competition in this sector so companies are pushed to develop products that are ever safer for people and better for the environment. Our decision today ensures that the merger between Dow and DuPont does not reduce price competition for existing pesticides or innovation for safer and better products in the future.”

The two companies first announced plans to merge in December 2015, and in July 2016 received the go-ahead from stockholders of both companies.

The European Commission, however, said certain commitments submitted by Dow and DuPont to address some of the Commission’s preliminary concerns were “insufficient to clearly dismiss its serious doubts as to the transaction’s compatibility with the E.U. Merger Regulation.”

Dow and DuPont have agreed to divest a significant part of DuPont’s existing pesticide business, including its R.&D. organization, in particular DuPont’s herbicides in cereals, oilseed rape, sunflower, rice and pasture and insecticides for chewing insect and sucking insect control for fruits and vegetables. They also will divest an exclusive license to DuPont’s product for rice cultivation in the European Economic Area to address the more limited concerns relating to fungicides.

Additionally, Dow has agreed to divest its two manufacturing facilities for acid co-polymers in Spain and the United States, as well as the contract with a third party through which it sources ionomers that it sells to its customers.