The European Commission (EU) has launched a probe into a 130 billion dollar merger integrated crop protection and Seeds merger between U.S. chemical giants DuPont and Dow Chemical.
Margrethe Vestager, EU Competition Commissioner, said on Thursday in Brussels that the merger, a combined entity could reduce competition and drive up prices for several of its farming products.
The commissioner disclosed that the companies agreed to the 130billion dollar merger in December, but the commission was formally notified of the merger in June and has until December 20 to reach a decision.
He said that the merger would create the world’s largest integrated crop protection and Seeds Company.
Vestager pointed out that the livelihood of farmers depends on access to seeds and crop protection at competitive prices, and warned that the merger must not lead to higher prices or less innovation for these products.
“Dow and DuPont operate in markets that are already globally concentrated.
“Its concerns focus among other things on the companies’ herbicide and insecticide business, where reduced competition “may have an impact on price, quality, choice and innovation,” he said.
Vestager observed that the whole crop protection industry could suffer from reduced innovation as a result of the merger, which would eliminate one of the few companies able to develop and launch new active ingredients.
He said that the commission would also look into Dow and DuPont’s seed business, as well as their operations in the supply of a particular type of plastics used in packaging and adhesives.
“The EU’s competition watchdog can demand concessions in order to approve the merger.
“Initial measures offered by the two companies were insufficient to dismiss its serious doubts,” he said.
He said the commission is working closely with its counterparts in the US, Brazil and Canada.
The EU is made up of 28 member states. (dpa/NAN)