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The Dow DuPont Merger Gets Another Nod

China’s Ministry of Commerce has granted conditional regulatory approval to the merger.

DuPont and Dow Chemical Company announced that China’s Ministry of Commerce (MOFCOM) has granted conditional regulatory approval of their proposed merger. On March 27, the European Commission conditionally approved the merger.

The merger between Dow and DuPont, which will have a combined value of about $130 billion, is one of several mergers/acquisitions currently working their way through anti-trust scrutiny in several countries. ChemChina is purchasing Syngenta, and Bayer is buying Monsanto.

MOFCOM’s approval is conditional on DuPont and Dow fulfilling commitments given to MOFCOM in connection with the clearance. This approval continues the progress that the companies have made to secure regulatory clearances around the world for the merger.

Consistent with commitments already made to obtain the European Commission’s regulatory approval for the proposed merger of equals, Dow and DuPont will divest certain parts of DuPont’s crop protection portfolio and research and development pipeline and organization and Dow’s global Ethylene Acrylic Acid copolymers and ionomers business.

In addition, Dow and DuPont have made commitments related to the supply and distribution in China of certain herbicide and insecticide ingredients and formulations for rice crops for five years after the closing of the proposed merger.

China is a critical market for both Dow and DuPont and will be for the three intended independent companies created following the merger, according to a joint statement. The intended three-way separation is expected to unlock significant value for all stakeholders as each company will be a growth-oriented leader in attractive segments where global challenges are generating strong demand for their distinctive offerings.

Dow and DuPont continue to work with regulators in the remaining relevant jurisdictions to obtain clearance for the merger. The expected closing of the merger is to occur between August 1, 2017 and September 1, 2017, with the intended spin-offs to occur within 18 months of closing. The companies expect that the first step of the intended separation process will be the spin-off of the Materials Science Company, assuming such sequencing would allow for the completion of all intended spin-offs within 18 months of merger closing and would not adversely impact the value of the intended spin-offs.

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