Dec. 11 (Reuters): Chemical giants DuPont and Dow Chemical Co have agreed to merge in an all-stock deal valuing the combined company at $130 billion, with plans to eventually split into three.

The deal, which is likely to face intense regulatory scrutiny, allows the new company - to be called DowDuPont - to rejig assets based on the diverging fortunes of their businesses that make agriculture chemicals and plastics.

Dow and DuPont have been struggling to cope with falling demand for farm chemicals because of falling crop prices and a strong dollar, even as their plastics businesses have thrived thanks to low natural gas prices.

The companies said the proposed split would create businesses focused on agriculture, materials and specialty products. Dow and DuPont shareholders will each own about 50 per cent of DowDuPont, excluding preferred shares.

DuPont chief executive Ed Breen will be CEO of DowDuPont, and Dow Chemical CEO Andrew Liveris will be executive chairman.

DuPont shares were down 4 per cent at $71.50 in premarket trading on Friday, while Dow's were up 1.5 per cent at $55.72.

"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," Liveris said in a statement.