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Dow-DuPont merger hits delays as EU demands missing deal info

November 4, 2016

Dow Chemical Co. and DuPont Co. face further delays to their plans to create the world’s biggest chemical company after the European Commission demanded more information about the deal.

The European Union merger regulator “has stopped the clock in its in-depth investigation,” the watchdog said in an email Friday. This happens “if the parties do not provide an important piece of information that the commission has requested.”

A previous suspension already delayed the EU’s probe by nearly a month early this year. The clock was suspended again as of Oct. 13, the commission said.

Late last month, Dow Chemical’s CEO said company’s planned $59 billion merger with DuPont may be delayed until February from a planned closing late this year, as European antitrust officials take more time to consider potential competition issues in pesticides and crop seeds.

Dow said in a written statement Friday that it always expected a “thorough review” and both companies are working with the EU and other regulatory agencies. The deal is expected to close in the first quarter of 2017, Dow said.

The plan is to divide the merged company into three separate publicly traded entities, including an agriculture operation that would be larger than market leaders Monsanto Co. and Syngenta AG.

The companies said Wilmington, Delaware, will be the headquarters for the combined agricultural business, but Indianapolis—the home of Dow AgroSciences, which has about 1,500 employees—will be one of its two “global business centers.”

Dow-DuPont, the first of a trio of mega-deals reshaping the agrichemicals industry, is embroiled in an extended probe by the EU over concerns that the combination may reduce competition for crop protection, seeds and some petrochemicals. The EU is separately examining China National Chemical Corp.’s bid for Switzerland’s Syngenta AG.

“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,” the commission said.

EU Competition Commissioner Margrethe Vestager has raised concerns that the industry is "quite concentrated already" and she’ll ensure that farmers have affordable prices and a choice of providers. EU lawmakers and environmental campaigners have been calling on her to block Bayer AG’s bid for Monsanto Co.

Regulators twice stopped the clock on their review of Halliburton Co.’s bid to buy oil-services rival Baker Hughes Inc. earlier this year, saying they needed more information from the companies. The firms abandoned the deal in May as the companies struggled to overcome antitrust concerns from the U.S., the EU and other regulators.

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