One of the potential mega-mergers of the year, the $130bn worth planned merger between the US chemicals giants Dow Chemical and DuPont, has hit a roadblock after the market watchdog raised a red flag over the deal. The European Commission-Trade has ordered an investigation into the announced merger as it believes that the deal would lead to alter the existing rulebook of market competition. The EU trade commission doubts that the merger would limit competition for supplies that are crucial to Europe’s farmers.
The merger plan has also sparked fears from farmers in the US. An initial market investigation carried out by the EU Commission has identified concerns that the creation of the world’s largest integrated crop protection and seeds company would reduce competition which could have an impact on price, quality, choice and innovation.
Margrethe Vestager, the EU Trade Commissioner in charge of competition policy said last week that the Commission needs to make sure that the proposed merger does not lead to higher prices or less innovation for these products. The livelihood of farmers depended on access to seeds and crop protection products at competitive prices, she said. The Commission is in the process of addressing the concerns that the creation of the world’s largest integrated crop protection and seeds company would reduce competition which could have an impact on price, quality, choice and innovation. Dow and DuPont are important innovators in the crop protection industry, which is characterised by a limited number of global companies with significant R&D capabilities. The transaction would lead to the elimination of one of the few companies able to develop and launch new active ingredients. Other potential areas of concern include access to seed technologies.
Three agriculture advocacy groups have urged the US Office of the Attorney General to challenge the proposed merger between DuPont and Dow because of possible antitrust violations.
The American Antitrust Institute (AAI), Food & Water Watch (F&WW) and the National Farmers Union (NFU) last week sent a letter to US Principal Deputy Attorney General Renata Hess. The three groups alleged the merger would consolidate an already shrinking industry, diminishing innovation, raise prices and reduce choices for farmers and consumers.
AAI, F&WW and NFU believe that additional merger activity, including Dow-DuPont, could harm innovation competition in two fundamental ways: By eliminating head-to-head competition in important parallel-path R&D and by reducing the field of rivals needed for pro-competitive stacking, the organizations wrote.
The EU Commission’s latest investigation plans could exacerbate the already strained transatlantic relations over EU inquiries into corporate America’s business practices. European Commission’s past investigations into big US deals have sparked intense debate between Washington and Brussels. The new investigation comes as both the US and EU are reviewing ChemChina’s $44bn takeover of Swiss agribusiness Syngenta.
One of the potential mega-mergers of the year, the $130bn worth planned merger between the US chemicals giants Dow Chemical and DuPont, has hit a roadblock after the market watchdog raised a red flag over the deal. The European Commission-Trade has ordered an investigation into the announced merger as it believes that the deal would lead to alter the existing rulebook of market competition. The EU trade commission doubts that the merger would limit competition for supplies that are crucial to Europe’s farmers.
The merger plan has also sparked fears from farmers in the US. An initial market investigation carried out by the EU Commission has identified concerns that the creation of the world’s largest integrated crop protection and seeds company would reduce competition which could have an impact on price, quality, choice and innovation.
Margrethe Vestager, the EU Trade Commissioner in charge of competition policy said last week that the Commission needs to make sure that the proposed merger does not lead to higher prices or less innovation for these products. The livelihood of farmers depended on access to seeds and crop protection products at competitive prices, she said. The Commission is in the process of addressing the concerns that the creation of the world’s largest integrated crop protection and seeds company would reduce competition which could have an impact on price, quality, choice and innovation. Dow and DuPont are important innovators in the crop protection industry, which is characterised by a limited number of global companies with significant R&D capabilities. The transaction would lead to the elimination of one of the few companies able to develop and launch new active ingredients. Other potential areas of concern include access to seed technologies.
Three agriculture advocacy groups have urged the US Office of the Attorney General to challenge the proposed merger between DuPont and Dow because of possible antitrust violations.
The American Antitrust Institute (AAI), Food & Water Watch (F&WW) and the National Farmers Union (NFU) last week sent a letter to US Principal Deputy Attorney General Renata Hess. The three groups alleged the merger would consolidate an already shrinking industry, diminishing innovation, raise prices and reduce choices for farmers and consumers.
AAI, F&WW and NFU believe that additional merger activity, including Dow-DuPont, could harm innovation competition in two fundamental ways: By eliminating head-to-head competition in important parallel-path R&D and by reducing the field of rivals needed for pro-competitive stacking, the organizations wrote.
The EU Commission’s latest investigation plans could exacerbate the already strained transatlantic relations over EU inquiries into corporate America’s business practices. European Commission’s past investigations into big US deals have sparked intense debate between Washington and Brussels. The new investigation comes as both the US and EU are reviewing ChemChina’s $44bn takeover of Swiss agribusiness Syngenta.
