Dow Chemical and DuPont are in advanced talks to merge, according to various media reports that surfaced on Wednesday. Via Bloomberg, a deal could be announced this week. It would create the world’s second largest chemical company behind BASF. An analyst at Alembic Global Advisers told Bloomberg a Dow-DuPont merger would likely result in a split into three different companies focused on agricultural products, specialty chemicals and plastics, respectively.
Bloomberg said it would rank among the top five deals in what is shaping up to be a record-breaking year for M&A activity. The energy sector has seen its share of megadeals this year — Shell acquired BG Group for $70 billion in April and Energy Transfer agreed to acquire the Williams Companies for $38 billion in September.
Low commodity prices are often a key driver of such deals — a Dow-DuPont deal may be a response to low crop prices putting pressure on the two firms’ agricultural chemical businesses, Bloomberg notes.
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