Dow Chemical and DuPont have agreed to merge, a deal that would create the world’s second largest chemical company behind BASF. The combined company — to be known as DowDuPont — will have a market capitalization of more than $130 billion and will ultimately split into three companies.
The spin-offs will be focused on the agriculture, material science and specialty products businesses, respectively. The $51 billion material science company will include Dow’s performance plastics and performance materials units and DuPont’s performance materials segment. The split will occur 18-24 months after the closing of the deal, which is expected in the second half of 2016.
Dow CEO Andrew Liveris will become executive chairman of DowDuPont, and DuPont CEO Edward Breen will serve as CEO. Dow and DuPont shareholders will each own 50% of the new company.
Reuters notes the Dow-DuPont merger — driven primarily by unfavorable conditions in the agricultural chemicals industry — could put pressure on competitors such as BASF and Bayer to consolidate.
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