DuPont Co. pushed back the closing date for its merger with Dow Chemical Co., as European antitrust authorities scrutinize the companies' agricultural businesses.
DuPont Chief Executive Ed Breen said the companies are negotiating potential divestitures in their pesticide operations to win approval for the deal, which would create an industrial behemoth worth nearly $129 billion.
The deal, announced in December 2015, has faced delays as antitrust regulators sought reams of information concerning the companies' competing businesses in insecticides, weedkillers and crop seeds. Dow and DuPont initially expected their deal to close late last year, but Mr. Breen told analysts Tuesday it is now unlikely to be completed until after March.
"The main concern is in the crop protection area," Mr. Breen said on a conference call discussing DuPont's fourth-quarter results. "That's where we've been focused with a remedy package."
Mr. Breen said the negotiations also concern some research and development commitments to soothe competition authorities' concerns that farmers could be left with fewer product choices, and a slimmer pipeline of new seeds and sprays.
"One of the reasons we're doing the merger is to create a new ag company with more resources in new product development," Mr. Breen said.
DuPont and Dow aim to unite their vast portfolios of chemicals, crop seeds, plastics and electronic components, eliminate $3 billion in annual costs and split into three separate companies within about 18 months. One company will be focused on agriculture, another on materials, and the third on specialty products like food ingredients and safety equipment. Mr. Breen said Tuesday the regulatory delays hadn't changed the cost-cutting target or the timeline for the breakup.
The companies are pursuing their deal amid global challenges facing industrial and agricultural companies. Regulators also are evaluating proposed agricultural deals between Bayer AG and Monsanto Co., and China National Chemical Corp. and Syngenta AG.
DuPont expects the U.S. dollar to continue strengthening in 2017, Chief Financial Officer Nick Fanandakis said, making U.S.-made products more expensive abroad. Meanwhile developing economies like Brazil have stalled and political uncertainty in the European Union is growing.
DuPont forecast first-quarter 2017 earnings would fall 18% but increase 8% on an adjusted basis. The past year's cost-cutting efforts are paying off, Mr. Breen said, but DuPont's agricultural division will suffer as U.S. farmers plant fewer acres of corn this year in favor of soybeans, a smaller business for the company.
Shares of DuPont gained 1.5% early in Tuesday's trading session.
DuPont reported an overall profit of $353 million or 29 cents a share for the quarter, compared with a loss of $421 million, or 26 cents a share, a year earlier. Excluding items, the company earned 51 cents a share, up from 27 cents.
Revenue dropped 2% to $5.21 billion. Analysts polled by Thomson Reuters had forecast earnings of 42 cents on $5.29 billion in revenue.
--Imani Moise contributed to this article
Write to Jacob Bunge at [email protected]
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