The Dow Chemical Co. and DuPont today announced that their boards of directors unanimously approved a definitive agreement under which the companies will combine in an all-stock merger of equals. The combined company will be named DowDuPont and will reportedly have a combined market capitalization of approximately $130 billion. DowDuPont will spin off into three independent and publicly traded companies, reportedly within18-24 months following the closing of the merger.

The new companies will reportedly include a leading global pure-play agriculture company; a leading global pure-play material science company; and a leading technology and innovation-driven specialty products company. Each business will reportedly have clear focus, an appropriate capital structure, a distinct and compelling investment thesis, scale advantages, and focused investments in innovation.

“This transaction is a game-changer for our industry and reflects the culmination of a vision we have had for more than a decade to bring together these two powerful innovation and material science leaders,” said Andrew N. Liveris, chairman and CEO, Dow. “Over the last decade, our entire industry has experienced tectonic shifts as an evolving world presented complex challenges and opportunities—requiring each company to exercise foresight, agility and focus on execution. This transaction is a major accelerator in Dow’s ongoing transformation, and through this we are creating significant value and three powerful new companies. This merger of equals significantly enhances the growth profile for both companies, while driving value for all of our shareholders and our customers.”

“This is an extraordinary opportunity to deliver long-term, sustainable shareholder value through the combination of two highly complementary global leaders and the creation of three strong, focused, industry-leading businesses,” said Edward D. Breen, chairman and CEO, DuPont. “Each of these businesses will be able to allocate capital more effectively, apply its powerful innovation more productively, and extend its value-added products and solutions to more customers worldwide. For DuPont, this is a definitive leap forward on our path to higher growth and higher value. This merger of equals will create significant near-term value through substantial cost synergies and additional upside from growth synergies. Longer term, the three-way split we intend to pursue is expected to unlock even greater value for shareholders and customers and more opportunity for employees as each business will be a leader in attractive segments where global challenges are driving demand for these businesses’ distinctive offerings.”

The new material science company will comprise DuPont’s Performance Materials segment and as Dow’s Performance Plastics, Performance Materials and Chemicals, Infrastructure Solutions, and Consumer Solutions (excluding the Dow Electronic Materials business) operating segments. Combined pro forma 2014 revenue for Material Science is approximately $51 billion.

The specialty products company intends to focus on unique businesses that share similar investment characteristics and specialty market focus. The businesses will include DuPont’s Nutrition and Health, Industrial Biosciences, Safety and Protection, and Electronics and Communications, as well as the Dow Electronic Materials business. Together, they reportedly create a new global leader in electronics products, with a combined pro forma 2014 revenue of approximately $13 billion.

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