By Austen Hufford 

Dow Chemical Co. and DuPont Co. again pushed back the time frame to finish their merger, but they said the deal is still on track as DuPont moved forward with plans for divesting assets to satisfy European regulators.

The companies now expect the deal, which has been delayed by intense regulatory scrutiny, to close in August 2017. When the pact was first announced in December 2015, it was expected to close in the second half of 2016. The companies' most recent target was the first half of this year.

Earlier this week, the European Union's competition watchdog cleared the merger on the condition they sell parts of DuPont's global pesticides business and associated research and development, as well as Dow's acid copolymers and ionomers business.

Following the EU decision, DuPont said Friday that it would sell its pesticide assets to Philadelphia-based FMC Corporation in exchange for that company's health and nutrition business and $1.2 billion in cash. FMC will receive DuPont's chewing pest insecticide portfolio, its global cereal broadleaf herbicides and a substantial portion of its global crop protection research-and-development efforts.

Divestitures are commonly required in large deals to assuage concerns over market power and consolidation within specific markets and industries.

The Dow-DuPont behemoth would serve as a vehicle for cutting costs before splitting into three separate businesses within two years after the deal closes. Those companies, each to be publicly traded, would focus on agriculture, material sciences and specialty products in nutrition and electronics.

On Friday, the companies said the first spun-off unit would be the material science company, expected within 18 months after closing. Dow and DuPont said they still expect their merger to generate about $3 billion of cost synergies and $1 billion of growth synergies.

FMC said the units it is buying will generate about $1.5 billion in revenue in 2017. The health-and-nutrition business had 2016 revenue of $743.5 million.

The move will make FMC the fifth-largest crop protection chemical company in the world by revenue. Shares of FMC jumped 16% on the news, while shares of Dow fell 0.3% and DuPont fell 0.8% in morning trading.

Write to Austen Hufford at austen.hufford@wsj.com

 

(END) Dow Jones Newswires

March 31, 2017 10:15 ET (14:15 GMT)

Copyright (c) 2017 Dow Jones & Company, Inc.
DuPont de Nemours (NYSE:DD)
Historical Stock Chart
From Feb 2024 to Mar 2024 Click Here for more DuPont de Nemours Charts.
DuPont de Nemours (NYSE:DD)
Historical Stock Chart
From Mar 2023 to Mar 2024 Click Here for more DuPont de Nemours Charts.