U.S. senators quiz business leaders on "tsunami" of consolidation in chemical industry
During a hearing today, U.S. senators quizzed officials with Midland-based Dow Chemical, DuPont and other major chemical companies about major consolidation in the chemical industry.
Iowa Sen. Chuck Grassley calls it a “tsunami” of consolidation.
In addition to Dow-DuPont, ChemChina is finalizing its $43 billion merger Syngenta and Bayer & Monsanto are moving forward with their $66 billion merger.
“Further concentration in the industry will reduce choice and raise of the price of chemicals and seeds for farmers which ultimately will effect choice and cost to consumers,” Grassley told the committee in his opening statement.
Grassley’s concern was echoed by Roger Johnson, the president and CEO of the National Farmers Union.
“You can have these companies in a position of making more profit by charging farmers higher prices and the competitive marker is not going to force those prices down,” Johnson testified.
Industry officials insist the mergers will create more, not fewer, product choices for farmers and will not hurt consumers.
“With the Dow-DuPont merger, we will bring our capabilities together,” Tim Hassinger, the president and CEO of Dow Agrosciences, told the committee, “and we will be able to more effectively compete and provide more product choices for farmers.”
Congress may hold hearing, but the ultimate decision on the mergers rests with government regulators.
U.S., E.U.and other international regulators are reviewing Dow and DuPont’s plan to merge.
Company stockholders have already approved the $130 billion deal. Company officials remain optimistic the merger can be completed by the end of the year. The plan calls for eventually dividing the company into three separate companies, each focusing on one aspect of the chemical industry. Two of the three will be based in Delaware.