DowDuPont Chiefs Confirm Merger Delay
- Dow CEO Liveris said the EU needs more time to consider competition issues in pesticides and crop seeds. “Regulators’ greatest concern is agriculture,” he told Bloomberg. “One of the strongest lobbies in the world out there is the farm lobby, and in Europe, the agricultural sector is very, very critical to them, somewhat protected.”
Confirming what has seemed obvious to most observers, the chiefs of Dow Chemical and DuPont have acknowledged that their merger won’t be completed by the end of 2016 as hoped, due to regulatory constraints. The two company chiefs appeared to differ slightly, however, in their estimate of exactly when closing will take place.
In an interview with the news agency Bloomberg this week, Dow CEO Andrew Liveris said he expected the deal to be completed during February 2017. DuPont chief Ed Breen, when presenting financial results for this year’s third quarter, was somewhat more vague. In the event that regulators in key jurisdictions use their full allotted time, closing would be expected to occur in the first quarter of 2017, he said.
Syngenta’s chief executive, Erik Fyrwald, likewise confirmed this week that the Swiss company’s takeover by ChemChina won’t take place by the end of this year as planned. Regarding the global agriculture market’s third mega merger, Bayer CEO Werner Baumann, presenting third-quarter financial results, said he expects the company’s takeover of Monsanto be completed by the end of next year. “We intend to submit the necessary application in the United States before the end of this year and in the European Union probably in the first quarter of 2017,” Baumann said.
The European Commission said earlier this month it would conduct an in-depth investigation into the Dow-DuPont merger plans and expected to make a decision by Feb. 6, 2017. US regulatory authorities have not published a deadline for a decision, although some believe it will be less stringent than the EU. Shareholders of the two US chemical giants approved the merger in July of this year. Liveris said the EU needs more time to consider competition issues in pesticides and crop seeds. “Regulators’ greatest concern is agriculture,” he told Bloomberg. “One of the strongest lobbies in the world out there is the farm lobby, and in Europe, the agricultural sector is very, very critical to them, somewhat protected.”
The Dow CEO said the value created by the merger is “Formularende worth a few months of delay.” He declined to say, however, which assets the two companies might offer to sell to gain antitrust approval.
Speculation recently has focused on Dow shedding its copolymers and DuPont being prepared to flog off a herbicides business.
Dow’s current leader is scheduled to become executive chairman of the merged DowDuPont – with Breen serving as CEO – but has said he intends to retire when the merger is complete. When asked by Bloomberg what he planned to do after stepping down, Liveris, who is Australian-born, suggested he might become involved in US politics.
As the US “is not doing a good job selecting candidates,” he said business leaders with worldly experience could be valuable in the political arena. “People like me should consider going and serving after they leave jobs like these,” Liveris, told the news agency, while saying he didn’t necessarily plan to run for any office.