US chemical giants Dow Chemical and DuPont have announced a plan to merge, in a deal valuing them at $US130 billion ($NZ195bn).
The all-share deal will eventually lead to the merged company, initially to be called DowDuPont, being split in three.
The three companies would focus on agriculture, materials and speciality products.
If the merger is cleared by regulators, the new company will be owned equally by current Dow and DuPont shareholders.
The companies aim to achieve the split into three within two years of the completion of the merger.
They hope to save $US3bn through cost-cutting during that period.
Potential tax savings were one reason for the complicated merger-before-breakup deal, analysts said.
James Sheehan, a SunTrust Robinson Humphrey analyst, said: "They need to merge first in order for the subsequent spin-offs to qualify as tax-free transactions in the United States."
At the same time, DuPont announced a cost-saving plan that will involve cutting about 10 percent of staff.
Dow chief executive Andrew Liveris will be executive chairman of the new company, while DuPont boss Ed Breen will be the new chief executive.
"This transaction is a game-changer for our industry and reflects the culmination of a vision we have had for more than a decade to bring together these two powerful innovation and material science leaders," Mr Liveris said.
Shares in Dow Chemical closed down 2.8 percent in New York, while DuPont fell 5.5 percent.