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Management Side
Missing information halts Europe's review of Dow, DuPont deal

WILMINGTON, Delaware (From Delaware Online) -- European Union antitrust regulators have halted their review of the proposed $130-billion merger between Dow Chemical and DuPont.

The European Commission, the EU's antitrust regulatory authority, suspended the review last week saying it needed more information about the deal and its potential impact on competition in Europe's agriculture markets.

"This procedure in merger investigations is activated if the parties do not provide an important piece of information that the commission has requested," Ricardo Cardoso, spokesman for the European Commission, said in an e-mail to the Wilmington News Journal. "To comply with merger deadlines, parties must supply the necessary information for the investigation in a timely fashion. Failure to do so will lead the commission to stop the clock."

Cardoso did not disclose the exact data the commission was seeking.

Dan Turner, a spokesman for DuPont called the delay and information request, "a routine procedural part" of the review process.

"It does not change our timing expectations," Turner said.

A source within DuPont dismissed the matter as merely a document production issue and said the company expects to quickly address it.

The European Commission will set a new review deadline once it received the missing data. It is unclear whether the delay will derail the companies' plans to close the merger in early 2017.

"Once the missing information is supplied by the parties, the clock is re-started and the deadline for the commission's decision is then adjusted accordingly," Cardoso said.

In August, the European Commission initiated a second review of the historic merger between the two chemical and agriculture industry giants. The panel was scrutinizing the deal for its impact on competition in the seeds, crop protection and other markets. Reviews are required under EU law before a merger can be completed.

Initially, the European Commission was expected to issue a decision in late December, but last week the agency granted both companies' request for a 10-day extension, pushing a possible approval date to early January 2017. The companies said in filings with the Securities and Exchange Commission the extension request is "a routine part of the review process." ''

At the time, DuPont's Turner said it was still possible the transaction could still close before the end of 2016 if the commission doesn't utilize the full extension. With the current delay, however, a 2016 completion would be near impossible.

Earlier this year, the two companies privately detailed to the commission a series of concessions they would make to address antitrust issues. Although the concessions have not been disclosed, they are widely believed to be sales of assets.

The commission, in a statement, said the concessions are "insufficient to clearly dismiss its serious doubts" about whether the merger will stifle innovation and competition throughout the EU. Concerns about other businesses developing competing technologies and price controls were among the issues raised by the commission

Margrethe Vestager, who heads the European Commission, indicated the agency may ask for additional concessions.

"The livelihood of farmers depends on access to seeds and crop protection at competitive prices," Vestager said in a statement. "We need to make sure the proposed merger does not lead to higher prices or less innovation for these products."

Similar reviews are ongoing in the U.S., Brazil and Canada.


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