MOSCOW (MRC) -- Chemical companies DuPont and the Dow Chemical Company have reached a proposed agreement with the US Department of Justice (DOJ) Antitrust Division that will enable the firms to advance the proposed merger of equals, said Chemicals-technology.
The companies received the approval on condition that DuPont will divest certain parts of its crop protection portfolio. Dow will therefore sell its global Ethylene Acrylic Acid copolymers and ionomers business.
Divestments in the proposed agreement are consistent with commitments already made to obtain the European Commission’s (EC) regulatory approval.
Dow's chairman and chief executive officer (CEO) Andrew Liveris said: "With today’s 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."
"We are on track to close our procompetitive merger in a manner that maintains the strategic logic and value creation potential of the transaction."
The proposed agreement with the DOJ is subject to court approval. The companies are not required to make any additional divestitures and no additional approvals are required in the US to close the merger.
DuPont's chair and CEO Ed Breen said: "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."
The all-stock merger will have a combined market capitalisation of nearly USD130bn. The transaction is expected to generate cost synergies of approximately USD3bn and growth synergies of around USD1bn.
Dow and DuPont have already secured clearance in several jurisdictions, including approvals in the US, Europe, Brazil and China. Currently, both the companies are working constructively with regulators to receive clearance from the remaining jurisdictions. The companies anticipate the merger will be completed in August this year with the intended spin-offs to occur within 18 months of closing.
MRC