Despite the European Union reopening its anti-trust probe into the merger of Dow Chemical and DuPont, a top executive in the merged company’s agricultural division said Thursday the two companies still plan for the merger to close by the end of the year.
Jim Collins, a DuPont executive vice president, is slotted to become the chief operating officer of the DowDuPont agricultural unit. Collins was among a spate of agribusiness executives who spoke Thursday at the Borlaug Dialogue hosted by the World Food Prize in Des Moines.
The EU announced earlier this month that European anti-trust regulators had halted their analysis of the proposed $130 billion merger. The EU also indicated it would decide by Feb. 6, 2017, whether to sign off on the merger of the two chemical giants.
Still, Collins told DTN in an interview that Dow and DuPont remain focused on closing the merger by the end of the year. The situation in the European Union “could possibly extend it into 2017,” Collins added.
“We’ve been collaborating and working with the regulators around the world, primarily in the U.S. and Europe,” Collins said. “We expected a very thorough process and it has been. We’ve worked in a very transparent way and provided a lot of answers to their questions. From my perspective, things have gone well.”
The U.S. Department of Justice also has not announced the end of its review or stipulated any demands of the companies before greenlighting the merger.
Within 18 months of closing the deal, the combined DowDuPont company will split off into 3 different businesses. That would include an agricultural division that carried a combined $16 billion in sales last year in seeds, traits and crop-protection chemicals. The other divisions would include a $46 billion material science company and a $12 billion company focusing on various specialty products.
Regarding the World Food Prize event, Collins said he had attended it multiple times in the past, but this was his first year addressing the group of executives, academics and leaders from various non-governmental entities from around the world. Collins said conversations and positions expressed at the World Food Prize help companies such as Dow and DuPont to shape their policies regarding global agriculture.
“I always enjoy this opportunity,” Collins said. “It’s a chance at least once a year where we invite in a lot of different global perspectives.”
With a theme this year of “food as a medicine” and “biofortification,” Collins spoke about the need for businesses in agriculture to innovate, educate and communicate.
“When we look at all of the challenges in front of us in this industry, innovation is a requirement, it’s not a choice,” Collins said.
In his speech, Collins said new technology may accelerate innovation in food production. DuPont has a global food security goal to invest $10 billion in research and development by 2020 and launch 4,000 new products. Collins said the company has a “very rich pipeline” working within its own company as well in public-private partnerships with public universities. Collins said advanced breeding technology now allows specific and exact changes to the DNA of a plant. These new technologies will allow companies to bring healthier foods to the market more quickly.
“Biofortification is an especially effective strategy in many developing countries that rely on one or maybe two staple crops for their nutrition,” he said.
In his interview with DTN, Collins said it was too early to speculate whether gene editing would face the same regulatory challenges moving forward that have slowed the ability to bring new biotechnology products onto the market.
Collins pointed to changes in Vietnam, where farmers often raise rice during the rainy season and shrimp farms during the dry season. But the salt water used for shrimp results in high salt levels in the soils and limits their rice yields. Collins said DuPont has worked with Vietnamese farmers to develop a hybrid rice seed that is much more tolerant to waters with higher salt content. The hybrid is yielding 30% to 40% more than open-pollinated varieties. In Africa, Collins pointed to biofortified sorghum helping improve yields and produce a healthier food crop.
Domestically, Collins highlighted the development of the Plenish soybean, which has a high-oleic oil designed to meet the needs of food companies. “It’s a healthier soybean oil that many food companies have moved to as they try to change the profile of their saturated fat. So we do have opportunities for American growers to participate in these higher value output and trait type of products,” Collins told DTN.
Chris Clayton can be reached at Chris.Clayton@dtn.com
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