US chemical giant DuPont said Friday it will sell off some of its pesticide business in exchange for FMC's health and nutrition business as a step towards clearing regulatory hurdles to its merger with Dow.
The deal follows Monday's approval by EU competition authorities for the $130 billion mega merger, which require DuPont to sell "major parts" of its global pesticides business. But it still needs approval of US and Chinese authorities
"The divestiture will satisfy DuPont's commitments to the European Commission in connection with its conditional regulatory clearance of the merger with Dow," DuPont said in a statement.
Dow Chemical and DuPont, two of the oldest US companies, in December 2015 announced the merger to create the world's biggest chemicals and materials group.
The companies said the merger now is set to close by the end of August. Dow and DuPont are dominant players for a huge range of chemical products, but the manufacturing of pesticides and fertilizers has drawn the most attention of anti-trust regulators.
The EU required Dow to sell two plants in Spain and in the US, with German giant BASF widely seen as a potential buyer.
The agreement announced Friday, due to close in the fourth quarter of this year, involves selling a portion of DuPont's Crop Protection business in exchange for FMC's Health & Nutrition business and payment of $1.6 billion.
"This agreement with FMC is a win-win," DuPont chief Edward D. Breen said in a statement. "It is pro-competitive; (and) it advances the regulatory approval process."
He called the nutrition and health business, which produces additives for food manufacturers and pharmaceuticals, "a key area of growth an opportunity" for the company.
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