EU approves Dow-DuPont merger pending divestitures

(AP Photo/Richard Drew)

The planned $130 billion merger between Dow Chemical and DuPont on Monday cleared a significant regulatory with the European Union, pending the sale of several agri-business divisions.

The deal means Dow will unload one of its facilities at the sprawling Freeport campus south of Houston. It’s home to an acid copolymer manufacturing business that will be sold to South Korea’s SK Innovation.

The other asset sales are focused on herbicide and agricultural seed businesses, with the European Union and the U.S. concerned that the world’s food production is coming under the control of only a handful of companies. The U.S. Justice Department hasn’t signed off on the merger, which is supposed to close midyear.

DuPont said Monday it agreed to sell some of its herbicide and insecticide portfolios, as well as much of its crop protection research division. DuPont said negotiations for the sales are ongoing.

Other pending agri-business mergers include German-based Bayer buying St. Louis’ Monsanto Co. and the China National Chemical Corp., known as ChemChina, buying Switzerland-based Syngenta.

The Dow-DuPont deal will create a temporary entity named DowDuPont that will splinter in three companies as soon as 2018.

Dow this year is largely completing its more than $6 billion expansion along the Gulf Coast, largely south of Houston in Freeport. Dow employs more than 6,000 people in the greater Houston area, mostly in Freeport and Lake Jackson.

Dow CEO Andrew Liveris emphasized recently that Dow’s Texas operations will see little effect from the merger. One of the three splintered companies, to be named Dow, would continue to own and run the Freeport complex, as well as DuPont’s facilities in Orange, Texas, near the Louisiana border.

The materials science business would operate under the Dow name, the agribusiness under DuPont, and specialty products under a yet-to-be-determined brand.

Liveris is retiring this year after the merger is complete. DuPont CEO Ed Breen will be the CEO of the merged DowDuPont.