Australia Watchdog Raises Concern Over Dow Chemical-DuPont Merger

(RTTNews) - The Australian Competition and Consumer Commission said that it has competition concerns about the proposed merger of The Dow Chemical Company (DOW) and E.l. Du Pont de Nemours and Company (DD) or DuPont.

"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.

Rod Sims noted that 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.

Sims also said 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. These competitive overlaps are explored in detail in the Statement of Issues," Mr Sims said.

The ACCC noted that 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...The ACCC is liaising closely with overseas competition regulators, as many of these potential competition issues arise in other countries as well," Mr Sims said.

The ACCC noted that it 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.