Dow and DuPont in talks for mega-merger

Dow Chemical and DuPont are in “advanced merger talks”, according to reports, and a combined entity would be worth around $US 130 billion.

The Wall Street Journal broke the news on Wednesday of the talks, which, if they went ahead, would see the world’s second-biggest chemical company in the world (after BASF) created.  

The Darwin-born head of Dow, Andrew Liveris, has sought a merger for over a decade, according to the WSJ. He would likely be executive chairman of the new firm.

The new company would probably split into two or three new groups, likely to be agricultural products, specialty chemicals, and plastics and commodities, according to Bloomberg.

The market greeted the news with approval, and shares in both companies closed up 12 per cent yesterday.

However, there are concerns from the American Farm Bureau that agricultural chemical prices could rise as a result of a deal.

Some anti-trust specialists believe there would be issues in getting approval for the merger.

"I would think that the ag chemical combination is the … most problematic," Peter Carstensen, an antitrust law expert at University of Wisconsin Law School told Reuters.