EU competition regulators open probe into Dow DuPont merger

European antitrust regulators have opened an "in-depth probe" into the proposed merger of US companies Dow and DuPont for its potential to reduce competition in areas such as crop protection, seeds and certain petrochemicals.

Margrethe Vestager, competition policy chief at the European Commission, said: “The livelihood of farmers depends on access to seeds and crop protection at competitive prices. We need to make sure that the proposed merger does not lead to higher prices or less innovation for these products.”

With the proposed Dow-DuPont merger creating the world's largest integrated crop protection and seeds company, the EC observed that it would take place in industries that are "already globally concentrated".

The EC has concerns the proposed merger could reduce competition in the seed and crop markets and that the reduction in the intensity of competition may have an impact on price, quality, choice and innovation, while the merger may lead to a reduction of innovation in crop protection as a whole, which it said was characterised by a limited number of global companies with significant R&D capabilities.

In seeds, the Commission expressed a worry that a merger would reduce incentives to license so-called “gene editing” technologies that could be used to materially accelerate the breeding of new seed varieties to competitors or may make the development of competing technologies more difficult.

Finally, Vestager's team also said it would investigate the potential effects of eliminating one competitor in the already small market for speciality polyolefins, which are thermoplastics derived from petrochemical products and widely used in packaging and adhesive applications.