CHEMICAL titans DuPont and Dow Chemical Co. have agreed to combine in an all-stock merger valued at US$130 billion in a first step toward breaking up into three separate businesses, a move that pleased activist investors and could trigger more consolidation.

    The “deal of three centuries,” as Wells Fargo analyst Frank Mitsch dubbed it, combines two of the biggest and oldest U.S. chemical producers and will generate cost and tax savings.

    The deal, announced Friday, will face intense regulatory scrutiny, analysts said, especially over combining their agricultural businesses, which sell seeds and crop protection chemicals, including insecticides and pesticides.

    Executives from both companies said the agrichemicals businesses have little overlap and any asset sales would likely be minor.(SD-Agencies)