The planned $130 billion merger between DuPont (NYSE: DD) and The Dow Chemical Co. (NYSE: DOW) has received conditional regulatory approval from China’s Ministry of Commerce (MOFCOM). The merger still requires approval in the U.S. and both companies say they are confident that approval will be granted.
DuPont says the MOFCOM approval is conditional on both companies fulfilling commitments given to the ministry, some of which are consistent with commitments made to receive approval from the European Commission. Additionally, both companies have make commitments to the supply and distribution of herbicide and insecticide ingredients for rice crops in China for five years after the merger closes.
"China is a critical market for both Dow and DuPont and will be for the three intended independent companies that will be created following the merger," the companies said in a Tuesday press release. "The intended three-way separation is expected to unlock significant value for all stakeholders as each company will be a growth-oriented leader in attractive segments where global challenges are generating strong demand for their distinctive offerings."
Both Dow and DuPont continue to expect the merger to close in August. If approved, the resulting operations will be spun into three-independent, publicly-traded companies. The spin-off is expected to occur within 18 months of the deal closing.
The spin-off will include an $18 billion agriculture business which will have a major presence at the current Dow AgroSciences facility on the northwest side of Indianapolis.