The EU on Monday approved a $130 billion mega-merger of US agro-chemicals giants Dow Chemical and DuPont, paving the way for major consolidation in a sensitive sector for farmers and the environment. The decision by antitrust regulators was subject to Dupont selling "major parts" of its global pesticides business, said the European Commission, the EU's executive arm.
"Due to significant commitments on products and the worldwide research and development organisation, the merger of Dow and Dupont can be approved," EU Competition Commissioner Margrethe Vestager said. Dow Chemical and DuPont, two of the oldest US companies, announced their tie-up in December 2015 to create the world's biggest chemicals and materials group.
The decision spares the EU from angering the administration of US President Donald Trump, just days before Vestager visits Washington. Vestager has not been shy of tackling major US companies since she took on the competition brief in 2014, winning praise in Europe but criticism across the Atlantic.
"This regulatory milestone is a significant step toward closing the merger transaction, with the intention to subsequently spin into three independent publicly traded companies," the companies said in a joint statement. The EU's demand is "pro-competitive and maintains the strategic logic and value creation potential of the transaction," the statement added. Dow and Dupont are dominant players for a huge range of chemical products, but the manufacturing of pesticides and fertilisers has drawn the most attention.