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DuPont And Dow Agree On Terms For Huge Merger

Specialist Thomas McArdle (left) works with traders at the post that handles Dow Chemical on the floor of the New York Stock Exchange. If a proposed merger goes through, shareholders of Dow and DuPont would each own about half of the new entity.
Richard Drew AP
Specialist Thomas McArdle (left) works with traders at the post that handles Dow Chemical on the floor of the New York Stock Exchange. If a proposed merger goes through, shareholders of Dow and DuPont would each own about half of the new entity.

The two largest chemical companies in America will become one entity named DowDuPont, as Dow Chemical and DuPont say they're joining in a "merger of equals." The new company will have a market capitalization of around $130 billion.

After the merger, the resulting behemoth would be split into what Dow Chairman and CEO Andrew N. Liveris calls "three powerful new companies," with a combined revenue of around $83 billion.

Now that the two companies' boards of directors have agreed to terms, their shareholders will also need to affirm the merger. Shareholders of Dow and DuPont will each own about 50 percent of the new enterprise.

The massive deal also will need the approval of federal regulators.

The deal is expected to close in the second half of 2016, with the segmentation taking place up to two years later.

The three corporations will have distinct identities, according to a news release announcing the merger. Here's a list of relevant quotes, along with the projected revenue for each proposed company:

Agriculture: "Leading global pure-play agriculture company that unites DuPont's and Dow's seed and crop protection businesses." Revenue: $19 billion.

Material Science: "A pure-play industrial leader, consisting of DuPont's Performance Materials segment, as well as Dow's Performance Plastics, Performance Materials and Chemicals, Infrastructure Solutions, and Consumer Solutions ... operating segments." Revenue: $51 billion.

Specialty Products: "The businesses will include DuPont's Nutrition & Health, Industrial Biosciences, Safety & Protection and Electronics & Communications, as well as the Dow Electronic Materials business." Revenue: $13 billion.

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