The Australian Competition and Consumer Commission has expressed concern about the effect a proposed merger between The Dow Chemical Company (Dow) and E.l. Du Pont de Nemours and Company (DuPont) could have on competition for crop protection products.

“The ACCC is concerned about the effect that the proposed merger may have on competition for a diverse range of products, including insecticides, seeds, and materials science products,” ACCC Chairman Rod Sims said.

“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.

“The proposed merger may also reduce the competitive tension in the research and development of new crop protection products.

“It could therefore reduce the rate at which new products come onto the market. This is especially significant where pests have developed resistance to older chemical controls.

“In addition, Dow and DuPont’s existing products overlap in a large number of areas.

“Market inquiries have raised particular concerns about certain competing patented insecticides for chewing and sucking pests.”

The ACCC has explored these competitive overlaps in detail in a Statement of Issues, released today.

Dow and DuPont are also both active in the research and development of new canola seed varieties which are adapted to Australian conditions.

DuPont recently sold the supply side of its seed business, but retained the research and development functions. Dow has not yet released canola seed in Australia but has announced that it will.

“The ACCC is concerned about the merger’s long‑term effect on canola seed innovation in Australia,” Mr Sims said.

“The ACCC is liaising closely with overseas competition regulators, as many of these potential competition issues arise in other countries as well.”

The ACCC invites further submissions from interested parties in response to the Statement of Issues by 24 November 2016. The ACCC’s final decision will be announced on 2 February 2017.

The Statement of Issues is available on the public register: DowDuPont Inc – proposed acquisition of EI du Pont de Nemours and Company and The Dow Chemical Company

Background provided by ACCC:

Dow is a global diversified chemicals company which is active in plastics, chemicals, agricultural sciences, and hydrocarbon and energy products.

DuPont is a global science and technology-based company which researches, develops, produces, distributes, and sells a variety of chemical products, electronics, polymers, agro-chemicals, seeds, food ingredients, and other materials.

Dow and DuPont propose to merge their two companies and spin the merged entity off into three separate companies focussing on agriculture, materials science, and specialty products. The proposed merger is concurrently being reviewed by competition regulators in many other jurisdictions including the EU, the USA and Canada.

Source: Australian Competition and Consumer Commission