But that combination, an all-stock deal creating a business valued at USD 130 billion, would hold only until the new DowDuPont splits into three separate, listed companies with sharper industrial focuses: agriculture, material sciences, and specialty products.
Dow and DuPont said the combined company will generate huge savings and strengthen their competitive positions in a world economy beset with overcapacity and low commodity prices.
Until the three-way split, planned for 18-24 months after the merger is completed, it will put them ahead of BASF, Germany's global chemicals powerhouse.
"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," said Andrew Liveris, Dow's chairman and chief executive officer.
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"Over the last decade our entire industry has experienced tectonic shifts as an evolving world presented complex challenges and opportunities."
The deal is billed as a merger of equals, although by revenues Dow, at USD 58 billion in 2014, is much bigger than DuPont, USD 35 billion last year.
By market valuation, though, the more profitable DuPont is slightly larger, USD 62 billion versus USD 61 billion for Dow.
Each has more than 50,000 employees worldwide.
After the share-swap deal is closed -- envisioned in the second half of 2016 and pending antitrust review -- investors of each company will hold equal shares of the combined group.
Liveris will become executive chairman of the new company, while DuPont's chief executive Ed Breen will be his CEO.
The two companies are longtime blue chip stars of US industry.
DuPont was founded in 1802, and became the foundation for one of the country's greatest family fortunes.
Dow Chemical, known for its Styrofoam brand insulation products is strongest in the plastics and industrial materials industries.