Dow/Dupont : Another Step Towards a Proper Assessment Concept of Innovation Effects of Mergers

The merger between Dow and DuPont, two US-based chemicals companies, was approved by the European Commission subject to extensive conditions. Besides price-related effects, serious concerns were raised as regards the effects of the merger on innovation competition in the crop protection industry. This case has been controversially discussed, because the Commission has extended its analysis of innovation effects of mergers also to the mediumand long-term effects at the industry level beyond the well-established analysis of innovation competition between identifiable overlapping R&D projects. In addition, the Commission has carried out an extensive investigation into the necessary assets and capabilities for innovation in this industry. This paper argues that the Dow/DuPont decision is an important positive step in the development of a proper analytical framework of investigating innovation effects of mergers. However the article also shows that still many critical questions can be raised and much further theoretical and empirical research is necessary for the development of an appropriate and separate assessment concept for the innovation effects of mergers that takes into account also the specific characteristics of innovation processes and the insights of different research approaches to innovation and competition