The European Commission has given the go-ahead to the $130 billion merger of US chemical giants Dow Chemical and DuPont.
The takeover, announced last year, is the first to win EU approval out of a trio of mega-deals that would reshape the global agrochemicals industry.
Recent transactions including Bayer AG's plan to buy Monsanto Co., and China National Chemical Corp's agreement to buy Syngenta AG, would reduce six key industry players to three located in the United States, Germany and China.
The Commission's approval is dependent on DuPont and Dow selling off some parts of their businesses to satisfy competition concerns.
'Effective competition'
DuPont has agreed to divest 'a significant part' of its existing pesticide business, including R&D activities.
"We need effective competition in this sector so companies are pushed to develop products that are ever safer for people and better for the environment," European Competition Commissioner Margrethe Vestager said in a statement.
"Our decision today ensures that the merger between Dow and DuPont does not reduce price competition for existing pesticides or innovation for safer and better products in the future."
'Growth synergies'
In addition to the cost savings, the transaction had the "potential for $1bn in growth synergies", Dow said in a statement.
"Longer term, the intended three-way split is expected to unlock even greater value for shareholders and customers and more opportunity for employees as each company will be a leader in attractive segments where global challenges are driving demand for their distinctive offerings," it added.
Antitrust experts said regulator's demand to sell large swatches of R&D facilities could set the benchmark for future deals.
Dow will sell two plants in Spain and the U.S. that make acid co-polymers.
