ACCC releases statement on Dow and DuPont merger

The Australian Competition and Consumer Commission (ACCC) has released a Statement of Issues on the proposed merger of The Dow Chemical Company and DuPont, citing concerns over the impact on competition for products such as insecticides, seeds and materials science products.

“Dow and DuPont may be the only suppliers, or potential suppliers, of ionomer and acid copolymer 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 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.”

Sims said Dow and DuPont’s products overlap in a large number of areas, with market inquiries raising particular concerns about certain competing patented insecticides.

The ACCC is concerned about the merger’s long‑term effect on canola seed innovation in Australia. 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.

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

The ACCC is inviting 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.