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U.S.
Senator Charles Grassley called for the review in a letter to
the U.S. Department of Justice's antitrust division. The Iowa
Republican said he was concerned the planned tie-up will
decrease competition in the farming sector following a flood of
mergers and acquisitions in recent years.
He also said he was worried the deal could raise barriers to
entry for smaller companies, hurt innovation and raise prices
for products.
Grassley's request for a federal review increases attention on
risks of consolidation as more large agribusiness deals are in
the offing. Bayer AG is pursuing a $62 billion acquisition of
Monsanto Co, the world's top seed maker, while Chinese
state-owned China National Chemical Corp [CNNCC.UL], or
ChemChina, plans to buy Swiss crop chemicals company Syngenta AG
for $43 billion.
A global downturn in grain prices and a strong dollar have
reduced U.S. farm income and prompted farmers to cut spending.
That has eaten into sales of the big six agrochemical and seed
companies that are now looking to bolster profits through
mergers and partnerships.
Dow expects the regulatory review of its proposed merger with
DuPont "will be a thorough process," a company spokeswoman said.
The deal is "pro-competitive and good for farmers and
consumers," she said.
Dow has previously said it expects the deal to close in the
second half of 2016.
DuPont had no immediate comment. The Justice Department declined
to comment.
In March, Grassley, who also serves on the agriculture
committee, joined other senators asking for the U.S. government
panel that reviews foreign acquisitions to assess the impact of
ChemChina's planned acquisition of Syngenta on domestic food
security .
The U.S. Department of Agriculture has agreed to join the review
panel, people familiar with the matter have told Reuters, a move
that subjects the deal to additional government scrutiny.
Last month, Monsanto turned down Bayer's acquisition attempt as
"incomplete and financially inadequate" but said it was open to
further negotiations.
Monsanto said the initial offer did not adequately address
potential "regulatory execution risks related to the
acquisition."
(Reporting by Tom Polansek; Editing by Alan Crosby and David
Gregorio)
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