Days after talks of a merger surfaced, Dow Chemical and DuPont agreed Friday to combine to become Dow DuPont.

Once the merger is complete, the two companies plan to split into three separate entities, focused on agricultural chemicals, specialty products and materials, according to the New York Times.

    By joining together to break into three separate companies later accords Dow and DuPont the ability to choose the best products in their research pipeline and shutter the rest, according to a note by Jeffrey Stafford, an analyst with Morningstar. He also expected job cuts.

    Despite the eventual break-up, the deal would undergo rigorous antitrust scrutiny for all three companies, particularly the one in agriculture chemicals.

Dow also announced Friday it would become the full owner of Dow Corning, restructuring it from its current 50-50 joint venture.

It is unclear the exact impact the merger will have on the Philadelphia region, although both companies have a large presence in the area. Dow has more than 1,7000 employees and plenty of real estate in southeastern Pennsylvania.

The merger comes a month after DuPont named its new CEO, Edward Breen. Considered a turnaround expert, Breen oversaw Tyco split into three separate companies while its chief executive and took over the role as shareholders continued to express disappointment in DuPont's performance.

Both companies have been working to slim down and shift focus to faster-growing units recently, and a merger would spur that process by making separate entities to house different business units.

If the deal comes to fruition, it would make 2015 an even bigger year for deals, eclipsing 2007. One of the blockbusters previously announced this year is Pfizer's $150 billion acquisition of Allergan.

With a market value of approximately $60 billion each, combing Dow and DuPont would make the second biggest chemical company in terms of revenue, with BASF of Germany the global leader.

Source: Philadelphia Business Journal