Dow Chemical and DuPont, both of which are pillars in the United States chemical industry, are currently in merger discussions, according to sources familiar with the matter.

The two companies each have a market value of about $60 billion. The resulting company, if the merger pushes through, will have a market value of about $120 billion to become the second-largest chemical company worldwide behind Germany's BASF. The merged company will have annual sales of over $92 billion.

However, two sources stated that a breakup could eventually happen after the merger. The company would be divided into three separate businesses focusing on agricultural chemicals, specialty products and materials such as plastics. Andrew Liveris, the CEO of Dow Chemical, and Edward Breen, the CEO of DuPont, will be holding the top two positions in the combined company.

The sources said that an announcement regarding the merger could possibly be made within the next few days, though caution that the talks were still incomplete and could still fall through.

Dow Chemical was founded in 1897 in Michigan as a bleach producer, while DuPont was founded in 1802 in Delaware as a manufacturer of gunpowder. The two companies have grown to become big names in the chemicals industry, with Dow Chemical producing a range of agricultural chemicals and plastics and DuPont claiming innovations such as Teflon and Kevlar.

The two companies, however, have recently fallen into difficult times, with Dow Chemical and DuPont receiving criticism for corporate bloat and their missing of targets for financial earnings.

Recently, Dow Chemical and DuPont have attempted to revamp their businesses by shedding low-margin assets concerning petrochemicals and oil and focusing instead on higher-margin specialty products. DuPont has dropped its performance paints and coatings business, along with the division that invented Teflon, while Dow Chemical has stopped sales of materials such as epoxy and chlorine.

A merger between the two companies is a sensible way of cutting costs and rationalizing businesses, which would be good for both Dow Chemical and DuPont. However, even if the two companies agree to combine their businesses, there is yet no guarantee that antitrust regulators will approve the merger.