Australia Weighs in on DowDuPont

04.11.2016 -

In its first weigh-in on the proposed merger of US chemical giants Dow and DuPont into DuPontDow, the Australian Competition and Consumer Commission (ACCC) has expressed concern about the transaction’s effect on competition for a diverse range of products, including insecticides, seeds and material science products.As Dow and DuPont may be the only suppliers or potential suppliers of ionomer and acid co-polymer materials to plastics manufacturers in Australia, the merger would remove competition between them, potentially to the detriment of Australian customers,” said ACCC Chairman Rod Sims.

The regulatory agency chairman said the proposed merger also could reduce the competitive tension in the research and development of new crop protection products and thus slow the introduction of new products into the market. This is especially significant, he said, where pests have developed resistance to older chemical controls.

Sims noted also that the ACCC intends to take a closer look at Dow and DuPont's existing overlap in a large number of product areas. Market inquiries, he said, “have raised particular concerns about certain competing patented insecticides for chewing and sucking pests.”

Another area where the authority plans to intensely scrutinize the plans is the merger’s potential long-term effect on in canola seed innovation in Australia. Both US chemical producers are active in the research and development of new canola seed varieties adapted to Australian conditions. DuPont recently sold the supply side of its seed business, Sims explained, but retained the R&D functions. Dow has not yet released canola seed in Australia but has announced plans to do so.

Sims said the ACCC “is liaising closely with overseas competition regulators, as many of these potential competition issues arise in other countries as well.” Up to Nov. 24, the agency is inviting further submissions from interested parties in response to the Statement of Issues published in the Australian public register. Australia plans to announce its final decision on the merger plans on Feb. 2, 2017. The EU’s verdict is expected around the same time.