Dow Chemical (NYSE:DOW) and DuPont (NYSE:DD) are expected to announce a mega merger by Thursday, CNBC reports, in what would be one of the biggest deals in a huge year for mergers and acquisitions. On Wednesday, Dow Chemical ended up by 11.93% at $56.97 and DuPont ended up by 11.85% at $74.49. As of Wednesday's trading close, Dow had a market valuation of $66.01 billion, while DuPont was valued at $65.28 billion.
Dow Chemical, based in Midland MI , has a rich history for more than 117 years, is the world’s largest chemical company in specialty chemical, advanced materials, agro-sciences and plastics businesses. While DuPont, based in Wilmington, DE, is a 213-year-old company which makes products and chemicals that go into industries such as petrochemicals, pharmaceuticals, food and construction.
Dow Chemical Co and DuPont are in talks to merge, creating a chemicals giant with a market value of more than $120 billion that could then break up into different businesses. The possible merger may see cost synergies to the tune of $3 billion people familiar with the matter said on Tuesday.
A deal, which would face regulatory approval in several countries, would allow the two U.S. companies to rejig their assets based on their diverging fortunes. Their plastics and specialty chemical businesses have benefited from lower energy costs, while their agrochemicals divisions have struggled to cope with weak demand for crop protection products.
While the deal was described by Reuters sources as a "merger of equals," Dow shareholders could argue for up to 60 percent of the merged company, citing its slightly larger market capitalization and higher earnings before interest, taxes, depreciation and amortization (EBITDA) over the past 12 months.