Ex-Ag Secretaries Back Dow-DuPont

OMAHA (DTN) -- A pair of former U.S. agriculture secretaries have written a letter endorsing the merger of Dow and DuPont.

The merger is needed to help the agricultural divisions of Dow and DuPont compete against even larger companies in the seed and ag-chemical sectors, the secretaries wrote.

Former secretaries Mike Johanns and Dan Glickman state that Dow and DuPont "are each huge conglomerates within which their relatively small agricultural businesses must compete for resources against other businesses."

"By coming together, they intend to create a single, independent, U.S.-based and -owned pure agriculture company capable of competing effectively against their still larger global peers," the two former secretaries wrote.

Johanns was USDA secretary under President George W. Bush in the early 2000s, as well as both a governor and senator representing Nebraska. Glickman was a USDA secretary under President Bill Clinton in the late 1990s and a congressman representing Kansas prior to that.

Dow Chemical and DuPont continue working through the regulatory hurdles in both the U.S. and Europe to clear their merger valued at $130 billion. The fate of the merger will be largely in the hands of whoever is pegged to lead the anti-trust division at the Department of Justice under President Donald Trump. However, Dow CEO Andrew Liveris also is a Trump adviser on manufacturing, so that likely will help with regulatory approval.

The Dow-DuPont merger as a single company would have roughly $81 billion in revenue, but Dow and DuPont plan to split the company into three different divisions with one focusing on agriculture while the others would focus on material sciences and specialty products.

Executives from Dow and DuPont have touted that the new agricultural company would have a mix of seed and pesticide business worth about $19 billion. The combined corn and soybean seed holdings of Dow and DuPont would account for roughly 40% and 36% of the market, respectively.

At the time the Dow-DuPont merger was announced, it would have become the largest seed-and-chemical company in agriculture, but that merger was then superseded by the $66-billion Bayer-Monsanto announcement this fall. ChemChina also is buying Swiss-based Syngenta for $43 billion.

In their letter, Glickman and Johanns focus on the need for a U.S.-based company as a dominate player in the crops sector. Dow-DuPont would be more focused on the interests of American farmers "in a marketplace that may soon be dominated by foreign-owned behemoths," the secretaries wrote.

"Without such an enterprise, totally and completely focused on agriculture, with every minute of every day devoted to working in partnership with farmers and the full range of entities working to feed an ever-expanding need for sustainable food sources, the American farmers who grow our food lose out -- and the people who eat it do, too," they wrote.

A full copy of the secretaries' letter can be viewed at http://bit.ly/…

Chris Clayton can be reached at Chris.Clayton@dtn.com

Follow him on Twitter @ChrisClaytonDTN

(AG/BAS)

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