DuPont and Dow Chemical Co. are in advanced talks to merge the two companies, creating a $120 billion chemical giant, after the two sides received pressure from shareholders amid weakened demand for crop-protection chemicals.
Reuters reports the shares of both companies jumped 12% Wednesday as news of the proposed merger began to circulate.
If the merger is successful, the companies would then split into three separate companies focused on agriculture, specialty chemicals and materials. It is unknown how the merger would affect the Dow Chemical plant in Iberville Parish and other locations for both companies throughout the state.
The Wall Street Journal first reported the merger talks Tuesday.
“I think a deal like this couldn’t have happened three to six months ago,” Sachin Shah, a merger arbitrage strategist at Albert Fried & Co, told Reuters, noting the companies’ sluggish stock performance made a deal more doable.
Dow Chief Executive Andrew Liveris has said as recently as October that his company was not in the market for “big M&A.” Multiple media outlets have reported the deal as a “merger of equals” that would value DuPont’s stock at high as $82 a share and Dow’s stock at $68 a share, according to Greg Harmon, founder of trading firm Dragonfly Capital.
Both companies have come under fire recently from big-name investors.
