WASHINGTON, D.C. — The National Farmers Union (NFU) blasted U.S. Department of Justice antitrust regulators who gave conditional approval last week to the $130 billion merger between the Dow Chemical Company and E.I. DuPont.

 

The deal creates the world’s largest crop protection and seed company, but NFU President Roger Johnson “condemned” the deal and said the move is “a continuance of failed national economic policy,” by the White House.

“This is deeply disappointing,” Johnson said. “It is this consolidation complex that has allowed money and power to be drained from family farm operations and rural communities. What’s resulted is lost jobs, lowered wages, inflated costs, decreased economic opportunity and depleted resources and services.”

The Justice Department’s announcement on June 15 approved the merger with conditions, ordering the companies to divest its multiple crop protection and petrochemical products.

Heading off a showdown between the Justice Department’s antitrust watchdogs including the Federal Trade Commission, the Dow Company agreed in February to sell its plastic’s operation, Ethylene Acrylic Acid or EAA copolymers and ionomers business, to SK Global Chemical, the South Korea-based subsidiary of SK Innovation, for $370 million. EAA operates in the United States and Spain, making a wide range of adhesive and wrapping products such as aluminum foil that use acid copolymers and ionomers, the high-pressure ethylene derivative products needed in the process.

Dow said the sale five months ago was an effort to overcome regulatory obstacles ahead of the agreement with the regulators.

Pending too is the sale now of the DuPont Company’s Finesse herbicide and Rynaxypr insecticide products to a buyer yet to be approved by the government.

The regulators said divesting of the assets “would eliminate important competition between Dow and Du-Pont in the development and sale of insecticides and herbicides that are vital to American farmers who plant winter wheat and various specialty crops.”

The government said selling the assets “prevent price hikes or lost innovation.”

The American Farm Bureau Federation’s Bob Young said he sees synergies by combining the two companies pointing out that the “deep pockets” from the companies will bring new products to the market cheaper at a time when farmers are looking even closer at their costs.

With the announcement, only Canada and Mexico need to approve the merger that the companies hope to finalize by the end of the year. The merger was first announced as an all-stock transaction in December 2015.

To win China’s approval this spring, the companies had to agree for DuPont to divest its R&D department and assets related to pesticides and herbicides used in the country’s primary rice crop, such as metsulfuron- methyl, azimsulfuron, cyantraniliprole and chlorantraniliprole and indoxacarb.

Decisions are also expected soon by the government watchdogs sharing reviews of several other billion-dollar transactions that involve a half a dozen other major agricultural giants that support U.S. farmers.

Germany’s Bayer AG has agreed to scoop up the St. Louis-based Monsanto Co. and the China National Chemical Corp.; referred to as ChemChina, hopes to conclude is purchase of Switzerland-based Syngenta. Also pending is the merger between the fertilizer companies Potash Corp. and Agrium.

China approves GMOs

Dow also won approval last week from China to export two of its new varieties of genetically modified corn and soybean crops following a trade agreement pushed by the Trump Administration to speed its review of biotechnology applications.

The decision includes Dow’s Enlist corn, engineered to fight weeds resistant to the widely used ingredient in Monsanto’s popular Roundup, the herbicide glyphosate. China also approved Monsanto’s Vistive Gold soybeans, as Dow further awaits its approval too for its own Enlist soybeans needed by the world’s top importer of soy.

“We’re very pleased to see the progress that’s being made, that’s been catalyzed by the discussions between the U.S. government and the Chinese,” said Joe Vertin, head of Dow’s Enlist Weed Control System.

Produced by the Dow AgroScience division, the Enlist platform is the company’s largest-ever launch and its strategic for the company’s success in reaching $600 million in seed sales projection by 2020.

The GMO crop approvals follow on the heels of a trade agreement that sent hundreds of pounds of beef to China last week, lifting a 14-year ban that halted imports from the United States in 2003 over the Mad Cow scare.