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Dow Chemical Still Surging On Merger Rumor

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Dow Chemical Co. (NYSE:DOW.WD) shares are still surging on a merger rumor with DuPont Co. (NYSE: DD), in what would result in the world's second-largest chemical company behind BASF SE (ETR:BAS) and Monsanto Company (NYSE: MON).

The company's shares are still on the rise this afternoon, up 10.79 percent to $56.39.

The company's $65 billion shares are soaring due to the aftermath of rumors that the firm is in late-stage merger talks with its peer DuPont. Dow Chemical was worth more than $60 billion, while DuPont's market capitalization was roughly $59 billion, at the end of Tuesday's trading.

The merging of the two chemical giants has certainly got investors excited today, as Dow Chemical shares are likely to keep moving up while DuPoint continues to work on figuring out a way to improve investor returns.

Jim Cramer said the merger can "compete more effectively in a world of diminishing growth" in an article Wednesday morning.

The S&P 500 index has risen 69 percent, while Dow's shares are up 53 percent and DuPont's are up just 35 percent, even following support activists' arrivals, in the past five years.

A Dow Chemical and DuPont deal outcome is currently estimated at $3 billion or more. The valuation is equivalent to a 2.5 percent increase in the value of the combined company, however both Dow and DuPont's rising shares are strong indicators that the market believes greater synergies can be achieved between the two companies.

Posted-In: News Jim Cramer Rumors Movers Media General


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