MIDLAND, Mich.—DuPont Co. and Dow Chemical Co. have reached a proposed agreement with the U.S. Department of Justice's antitrust division. This would permit the proposed merger of equals to go ahead.
This is the latest of many regulatory hurdles which the proposed merger has had to overcome. To gain antitrust approval from the European Union, DuPont is divesting some of its crop protection portfolio, while Dow is divesting its ethylene acrylic acid copolymers and ionomers business. The U.S. agreement does not require any further divestitures.
"With the DOJ clearance, we have taken a significant step forward in bringing together these two iconic enterprises, and in the subsequent intended separation into three leading, independent innovation-based science companies that will generate significant benefits for all stakeholders," Andrew Liveris, Dow chairman and CEO, said in a statement.
The merger is expected to generate cost synergies of about $3 billion, and growth synergies of about $1 billion. They hope to close the merger in August 2017, and complete the spin-offs within 18 months of the closure.
To date, Dow and DuPont have obtained clearance in many jurisdictions, including approvals in the U.S., Europe, Brazil and China. The companies are working constructively with regulators in the remaining jurisdictions to obtain clearance for the merger and are making progress in fulfilling the requirements of the conditional approvals that have already been received.
"With this review completed, we are on track to close our procompetitive merger in a manner that maintains the strategic logic and value creation potential of the transaction," Ed Breen, chairman and CEO of DuPont, said in a statement. "Going forward, the intended subsequent spin-offs are expected to unlock significant value for shareholders, as we execute our plan for each company to be a growth-oriented leader in attractive segments where global challenges are generating strong demand for their distinctive offerings."