ACCC flags DuPont-Dow Chemical merger fears

A merger could hurt competition insecticides, seeds, and materials science products, says the ACCC.

The ACCC raised fears competitive tensions for a number of important agricultural products could be eroded. Picture: AFP.

The proposed $160 billion tie-up of US chemical giants DuPont and Dow Chemical has stirred concern from Australia’s competition watchdog, as antitrust regulators around the world threaten to derail the deal.

The Australian Competition and Consumer Commission today released a statement of issues on the planned merger, noting fears competitive tensions for a number of important agricultural products could be eroded.

“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,” 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.”

Other products labelled as potential flashpoints for a rejection from the regulator included patented insecticides for chewing and sucking pests.

Mr Sims also detailed anxiety about the prospect of a reduction in R&D activities following any combination of the two giants, which could see a reliance on older products that may no longer be as effective for farmers.

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

“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.”

Mr Sims said discussions with overseas counterparts were being held to better assess the giant merger given similar issues have been flagged elsewhere.

Submissions to the statement of issues are due by November 24, with a final decision set for February 2, 2017.

The planned date for a decision comes four days before the EU is slated to rule on the merger.