Dow Chemical, DuPoint Are In Advanced Talks About Merger

Stocks in the United States were rallying earlier today, as Dow Chemical Co.

is in its advanced stages with talks to merge with DuPont Co.

in what may be the largest deal in the chemicals industry. The transaction would create the world's second-largest chemical company behind BASF SE

as well as the largest pesticide and seed company, surpassing Monsanto Company

. An announcement may come as early as this week, according to people with knowledge of the matter. Following the merger, Dow Chemical would then be able to break into about two to three businesses because of the regulatory issues, however, there is no guarantee that the DuPont-Dow Chemical deal will get done. In fact, the talks are still said to be far apart. Kellner Merger Investor Fund predicted the wave of oil & gas M&A was on the horizon months ago. Benzinga had a chance to speak with Chris Pultz, manager of the Kellner Merger Investor Fund about his take on the much-discussed wave of oil & gas M&A. Pultz assured Benzinga that the wave of oil & gas M&A is still on the horizon. Pulz said that it's only a matter of time. He believes many potential deals have been put on hold for now until companies are more confident in volatile oil prices. "If you're the seller of an asset, you don't want to be the guy who sold your company at $45 oil after it rebounds back to $65-plus," Pultz added. "Once you get one big guy making a move, it's going to be a pile-on effect where it will be a scramble for people to pick up the assets before they start to trade up again." With the continuing stream of major deals such as the ones announced, as well as the potential for a landslide of oil & gas deals in the near future, the M&A market appears as strong as healthy as it has ever been. Morgan Stanley's Oil Services analyst Ole Slorer said that companies with a market cap of less than $10 billion and low leverage along with differentiated technologies represents the ideal company to be acquired. Slorer expects additional M&A activity with equipment names being as the "main focus," although the consolidation activity could eventually spread to offshore drillers and domestic pumpers.