Dow, DuPont merger hearing next month

THE COMPETITION Tribunal will hold a hearing on August 4 into the proposed merger between agrochemical giants Dow and DuPont.

The tribunal was concerned about how the merger would affect competition.

It has requested further information from the Competition Commission about the market for maize seed in South Africa, and specifically about a licensing remedy that the parties have proposed in response to the commission’s concerns.

Dow is the parent company of the Dow Group, which is active in the development, production and distribution of plastics, chemicals, agricultural products, and energy products and services.

DuPont develops, produces, distributes and sells chemicals, polymers, agrochemicals, seeds and food ingredients.

At the beginning of this month, the commission conditionally approved the merger.

The commission’s head of communications, Sipho Ngwema, said earlier this month: “Although there is no direct overlap arising in respect of the commercialisation of hybrid and genetically modified hybrid maize seed in South Africa, since Dow does not have maize-seed commercial operations in the country the commission found that the proposed transaction will likely result in the removal of potential competition.”

Dow indicated that it had plans to enter the South African commercial maize-seed market.

“The commission is required to consult a number of potential entrants/licencees in this market and to submit an additional report to the tribunal. The hearing of the matter will continue on August 4,” the commission said.

The companies were willing to address the concerns relating to maize seed.

“Dow will make available 81 maize hybrids and seven maize inbred lines to other third parties for licensing of these hybrids and inbreds in South Africa,” the group said.

The commission was of the opinion that this would ensure that smaller maize-seed producers would be able to license and introduce new hybrids.