Shares of Dow Chemical and DuPont are trading sharply higher amid reports that the two chemical giants are in advanced merger discussions.
The Wall Street Journal reported on Tuesday that the companies were planning to merge and then split into three companies focused on agriculture, specialty chemicals and materials.
Shares of Dow Chemical, based in Midland, Michigan, rose almost 11 per cent to $US56.40 in afternoon trading on Wednesday after hitting an all-time high of $US56.88 earlier in the day.
Shares of DuPont, based in Wilmington, Delaware, were up 11.4 per cent at $US74.38.
The two companies, both with strong positions in the agriculture sector, declined to comment on media reports of a possible merger and an official announcement was possible as early as Thursday.
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A merger of DuPont and Dow, each with a market capitalisation of more than $US60 billion ($A83.15 billion), would create the world's second-largest chemical company, behind BASF SE.
DuPont employs more than 60,000 people worldwide, while Dow has more than 50,000 employees.
A merger likely would result in significant job cuts because of overlapping businesses.
"DuPont has always been a great partner with our state, and we expect the lines of communication to remain open if anything significant were to materialise," said Kelly Bachman, a spokeswoman for Delaware Governor Jack Markell.
Dow was founded in 1897 by Canadian-born chemist Herbert Dow to produce bleach using new technology he had developed to extract chlorine from brine.
DuPont was founded in 1802 by French immigrant E.I. DuPont, who established a gunpowder manufacturing operation along the Brandywine River in Wilmington.
In the years since, the two companies expanded into a wide range of specialty and commodity chemical operations resulting in a variety of iconic products, from the Ziploc sandwich bags and Saran wrap developed by Dow to Dupont's Teflon coatings and Kevlar body armour.
In recent years, however, both companies have focused on agriculture, as global demand for increased food supplies has driven sales of genetically engineered seeds, fertiliser, herbicides and pesticides.
