U.S. chemical and agriculture business giants, Dow Chemical and DuPont, announced Friday they will merge, creating a company valued at $130 billion.
The two companies say the merger will be the first step toward another rearrangement: breaking up into three separate businesses focused on agriculture, material science and speciality products.
The proposed merger would temporarily create one of the world's largest companies, rivaling Germany's global chemicals powerhouse BASF.
The deal will likely face scrutiny by antitrust regulators. Senate Judiciary committee Chairman Chuck Grassley said in a statement Friday that the proposed merger "demands serious scrutiny."
The companies say the deal, expected to close in the second half of 2016, would cut annual expenses by $3 billion. DuPont said it would also allow it to cut about 10 percent of its workforce.
The companies have been struggling with falling demand for farm chemicals and low commodity prices.
Dow chairman and CEO Andrew Liveris will become the executive chairman of the combined company, while DuPont chairman and CEO Edward Breen will be the CEO.
The company will have dual headquarters in Michigan and Delaware, where each currently is based.
Shares of both companies rose Wednesday when news of the pending merger first leaked, but shares fell on Friday.
Dow, founded in 1879, is known for its plastics, agrochemicals and its Styrofoam brand insulation products.
DuPont, founded in 1802, makes products used in petrochemicals, pharmaceuticals, food and construction. It also created Kevlar, which is used in body armor.