DuPont and the Dow Chemical Company are set to merge and later break up into three independent companies in a deal which is expected to deliver $4 billion in cost synergies.
DowDuPont will initially be worth $130 billion but will later separate into three independent companies focusing on agriculture, material science and specialty products.
Material sciences is likely to be the largest division and would cater to the packaging, transportation and infrastructure industries.
The deal is expected to close in the second half of 2016 but depends on regulatory approval. The move into separate units is likely to occur 18 months to 24 months later.
Some $3 billion synergies are expected to be delivered over two years with a further $1 billion expected afterwards.
Dow and DuPont have been hit by weaker demand for farm chemicals, due to falling crop prices and a strong dollar, though low oil prices mean their plastics businesses have performed strongly.