The EU today launched an investigation into the merger of US agri-chemicals giants Dow Chemical and DuPont to see if one of the world's largest tie-ups will reduce competition and harm customers.
"The livelihood of farmers depends on access to seeds and crop protection at competitive prices. We need to make sure that the proposed merger does not lead to higher prices or less innovation for these products," EU Competition Commissioner Margrethe Vestager said in a statement.
Dow Chemical and DuPont, two of the oldest US companies, announced the tie-up in December to create the world's biggest chemical and materials group valued at USD 130 billion.
The European Commission, the executive arm of the 28-nation European Union, said it had opened the "in-depth probe" to determine if the deal was in line with the bloc's merger regulations.
"The Commission will investigate further whether the deal may reduce competition in areas such as crop protection, seeds and certain petrochemicals," the statement said.
"The transaction would take place in industries that are already globally concentrated." Given the global reach of the new entity, the Commission said it was "cooperating closely" with other countries, notably the US, Brazil and Canada in assessing the impact.
It said the two companies submitted remedies last month but these were "insufficient" to allay its concerns and so it decided to launch the probe which will last 90 days to December 20.
Dow Chemical and DuPont said that they had expected the investigation and were working closely with regulators.
"The companies continue to believe the merger is procompetitive and good for customers and consumers," they said in a joint statement.
"Dow and DuPont will continue to work constructively with the Commission to address their concerns and to obtain clearance for the merger, which we are confident will be achieved.
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