Dow Chemical Co. and DuPont Co. will meet European Union antitrust regulators at a closed-door hearing next week to make the case for their planned $60 billion merger, according to two people familiar with the process.
The companies will attempt to counter EU concerns at the Jan. 9 hearing that their tie-up might hurt spending on research and development for agrochemicals, holding back innovation in an industry critical to the global food chain. The pair have been talking to regulators in recent weeks to better understand the issues, one of the people said, who declined to be identified because the process is private.
The hearing is the last opportunity for companies to make their case before regulators weigh whether a deal should be approved or blocked. Dow and DuPont made an offer in July that the EU said was insufficient to dismiss its "serious doubts" about the deal. They can still make another offer.
Unlike a trial, the hearing takes place in front of senior EU officials with lawyers laying out their arguments, sometimes bringing in testimony from other companies that support them. Rivals can also make presentations.
Dow and DuPont declined to comment other than to say they were working with regulatory authorities. The European Commission declined to comment.
The companies will argue that any cost cuts won’t result in less research, just eliminate duplication as they screen thousands of chemicals for breakthroughs. They say the industry demands that they constantly innovate to fight new pests and diseases.
Dow and DuPont will cut some $300 million from research, they said in a presentation last December. That’s part of an effort to achieve $3 billion in cost synergies as they merge and split into three independent, publicly traded companies focusing on agriculture, material science and specialty products. Plans to complete the deal were pushed back after the EU twice suspended the review to seek more information from the companies.
The merger is among a trio of pending deals -- including Bayer AG’s agreement to buy Monsanto Co. and China National Chemical Corp.’s agreement to buy Syngenta AG -- that could reshape the agricultural-chemicals industry, which produces chemicals that farmers use to control insects, weeds and fungus, among other pests. EU Competition Commissioner Margrethe Vestager has warned that the deals could leave the sector "quite concentrated."