DuPont, Dow to merge in 130 bln USD deal

U.S. chemical giants DuPont and Dow Chemical Friday announced their merger in an all-stock deal worth up to approximately 130 billion U.S. dollars.

The combined company will be named DowDuPont, with plans to pursue a separation into three independent, publicly traded companies through tax-free spin-offs.

The companies said the split would occur as soon as feasible, which is expected to be 18-24 months following the closing of the merger, subject to regulatory and board approval.

Dow and DuPont shareholders will each own about 50 percent of DowDuPont on a fully diluted basis, excluding preferred shares.

Under the terms of the transaction, Dow shareholders will receive a fixed exchange ratio of 1.00 share of DowDuPont for each Dow share, and DuPont shareholders will receive a fixed exchange ratio of 1.282 shares in DowDuPont for each DuPont share.

"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 Liveris, Dow's chairman and CEO.

DuPont Chief Executive Ed Breen will be CEO of DowDuPont, and Dow Chemical CEO Liveris will be executive chairman.

The transaction is expected to deliver approximately 3 billion dollars in cost synergies, with 100 percent of the run-rate cost synergies achieved within the first 24 months following the closing of the transaction. An additional upside of approximately 1 billion dollars is expected from growth synergies.

DuPont shares were down over 1 percent in early trading on Friday, while Dow's were down over 4 percent. Endi