DuPont and Dow Chemical Negotiating Possible Merger

Dow Chemical and DuPont are talking about merging which would create a giant in the chemical industry that would have a $130 billion market value that could then be broken into different businesses, said people that are familiar with what is taking place.

A deal would face approval by regulators in a number of countries, but would allow the two companies based in the U.S. to shuffle assets based upon their diverging fortunes.

The specialty chemical and plastic businesses are benefiting from lower costs of energy, while their divisions in agrochemicals are struggling to keep up with weaker demand for products of crop protection.

Following what is likely to be considered a merger of two equals, the new combined company could then be split into agrochemicals, material sciences and specialty products said people familiar with the situation.

Andrew Liveris the CEO as Dow and Edward Breen the DuPont CEO would hold the top two jobs in the new company one person close to the situation said.

A national newspaper in the U.S. was the first to report the merger talks were being held.

This possible merger might see over $3 billion in cost synergies reported those close to the talks.

As of the end of trading on Tuesday, Dow had a $58.97 billion dollar market value while DuPont’s was $58.37 billion.

Under Breen, DuPont who took over last month as CEO has already talked with rivals, about options for its business in agriculture, including with Dow.

Dow has reviewed its options for its seeds and farm chemicals unit, which reported falling sales for close to a year.

This past August the largest seed business in the world, Monsanto abandoned a bid of $45 billion for Syngenta a rival as declining prices of grain and income at farms led to big players in the farm seeds and chemical business becoming the talk of consolidation.

However, before any merger is announced there is speculation about the possible combination, which could overtake BASF in Germany in revenue, might receive intense scrutiny from antitrust regulators.

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