The Competition Commission of India (CCI) conducted a thorough investigation into a merger of equals between the Dow Chemical Company and DuPont (EI du Pont de Nemours & Company) to form DowDuPont with a combined market capitalization of around US$130 billion.
“The aggregate value of worldwide assets as well as turnover of Dow and DuPont, and the aggregate value of assets as well as turnover in India exceeded the jurisdictional thresholds in India,” said Shiraz Patodia, a partner at Dua Associates, which was the India antitrust counsel for Dow. “Therefore, clearance from the CCI had to be obtained in relation to the said transaction.”
Patodia said the transaction fell within the definition of a “combination” under section 5(a) of the Competition Act, 2002. The products manufactured/sold by Dow and DuPont in India were found to be overlapping in the broader segments of agriculture, specialty chemicals and materials sciences.
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“CCI was of the view that there was a likelihood of an appreciable adverse effect on competition in India for: (1) fungicides for grapes that target fungus Ascomycota; and (2) MAH [maleic anhydride] grafted polyethylene (low graft),” Patodia told India Business Law Journal.
The modifications for the grape fungicide included furnishing undertakings not to enter commercialization of the concerned product for a specified time, and withdrawal of relevant registrations. The modifications for MAH grafted polyethylene (low graft) included transfer of Dow’s business in India to an independent third party.
Dua partners Shashivansh Bahadur, Neeraj Kumar and Kunal Mehra worked with Patodia on the deal. Cleary Gottlieb Steen & Hamilton was the instructing counsel for Dow. Shardul Amarchand Mangaldas & Co was counsel for DuPont, with Skadden Arps Slate Meagher & Flom the instructing counsel.
DowDuPont will operate as a holding company with agriculture, materials science, and specialty products divisions. Dow shareholders received a fixed exchange ratio of 1 share of DowDuPont for each Dow share, and DuPont shareholders received a fixed exchange ratio of 1.282 shares of DowDuPont for each DuPont share.
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