DuPont & Co (NYSE:DD) will swap some assets with FMC Corp (NYSE:FMC) as part of a condition set by Brussels to clear its US$130bn merger with Dow Chemicals.
US chemical producers DuPont and Dow Chemicals received approval for their merger from the European Commission on Monday after agreeing to sell significant asset sales to address competition concerns.
DuPont said today it had agreed to sell a portion of its crop protection business to FMC and would buy a majority of FMC’s health and nutrition arm.
DuPont will fetch about US$1.6bn due to the difference in the value of the assets.
The company also said it has pushed back the completion date of its merger with Dow Chemicals for the third time.
It said the deal was now expected to close between 1 August and 1 September, compared to a previous estimate for the first half of 2017.
Under the conditions of the deal, DuPont will also divest some of its research and development facilities to FMC.
The merger includes a cash portion of US$1.2bn and working capital of US$425mln.
The deal will see the two companies combine and then break apart into three separate, publicly traded firms.
Dow will sell two acid co-polymer manufacturing facilities in Spain and the US, along with a contract with a third party through which it buys ionomers to South Korea's SK Innovation.
The European Commission’s requirement to sell assets was prompted by worries that the merged company would reduce price competition and would have few incentives to produce new herbicides and pesticides.
Ahead of the opening bell in US markets, shares in DuPont rose 0.20% to US$81.64 while shares in FMC jumped 14.47% to US$61.50.