Dow Chemical, DuPont in talks on mega-merger: banking sources

Dow Chemical and DuPont are in talks for a mega-merger that would yield the world's top chemical giant, with products from pesticides to genetically modified organisms, banking sources told AFP Tuesday.

The new entity would bring together two companies whose combined annual sales would total more than $90 billion.

In 2014, Dow sales reached $58.2 billion while DuPont's reached $34.7 billion.

Current industry leader, Germany's BASF, had $81 billion in sales during the same period.

The two banking sources emphasized that no deal has been signed, but confirmed information first published in The Wall Street Journal.

The merger would create a company with three separate divisions: agriculture, specialty products, and materials and material sciences, according to the two sources.

Dow Chemical and DuPont currently have activist investors -- Daniel Loeb (Third Point) and Nelson Peltz (Trian) respectively -- who accuse the companies of insufficient profitability.

Should the merger go through, Dow CEO Andrew Liveris would be the chairman of the new company while Edward Breen who currently heads DuPont would take over as CEO.

Both companies said they could not comment on the matter when contacted by AFP.

On Wall Street, the two companies jumped in online after-hours trading. Dow Chemical climbed 5.50 percent to $53.70 while DuPont rose 6.23 percent to $70.75.