DuPont and The Dow Chemical Company will merge into a combine company named DowDuPont, according to a press release.

The companies announced Friday that their boards of directors unanimously approved an agreement for an all-stock merger of equals. In the next 18-24 months, DowDuPont will separate into three independent, publicly traded companies through tax-free spinoffs. The new company will have a combined market capitalization of approximately $130 billion at announcement.

“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,” said Andrew N. Liveris, Dow’s chairman and CEO. “Over the last decade our entire industry has experienced tectonic shifts as an evolving world presented complex challenges and opportunities – requiring each company to exercise foresight, agility and focus on execution.

The first of three spin-offs agriculture company will unite both companies’ seed and crop protection businesses. Dow and DuPont’s combined pro forma 2014 revenue for agriculture was approximately $19 billion. A material science company will be made of DuPont’s Performance Materials segment and Dow’s Performance Plastics, Performance Materials and Chemicals, Infrastructure Solutions and Consumer Solutions (excluding the Dow Electronic Materials business) operating segments. Their combined pro forma 2014 revenue was approximately $51 billion. A third company focusing on specialty products will include DuPont’s Nutrition & Health, Industrial Biosciences, Safety & Protection and Electronics & Communications, as well as the Dow Electronic Materials business. Their combined pro forma 2014 revenue is approximately $13 billion.

The combined company will establish advisory committees for each of the three businesses. Breen, chairman and chief executive officer of DuPont, will lead the agriculture and specialty products committees, and Liveris will lead the material science committee.

“Each of these businesses will be able to allocate capital more effectively, apply its powerful innovation more productively, and extend its value-added products and solutions to more customers worldwide,” Breen said. “Longer term, the three-way split we intend to pursue is expected to unlock even greater value for shareholders and customers and more opportunity for employees as each business will be a leader in attractive segments where global challenges are driving demand for these businesses’ distinctive offerings.”

Following completion of the merger, Dow shareholders will receive a fixed exchange ratio of 1.00 share of DowDuPont for each Dow share, and DuPont shareholders will receive a fixed exchange ratio of 1.282 shares in DowDuPont for each DuPont share. Both companies’ shareholders will each own approximately 50 percent of the combined company on a fully diluted basis, excluding preferred shares.

The transaction is expected to deliver approximately $3 billion in cost synergies, reaching 100 percent of run-rate cost synergies within the first 24 months. An additional approximately $1 billion is expected from growth synergies.

When the merger is complete, Liveris, president, chairman and CEO of Dow, will become executive chairman of the newly formed DowDuPont Board of Directors and Breen, chair and CEO of DuPont, will become CEO of DowDuPont. The new board will have eight current DuPont directors and eight current Dow directors. The full list of directors will be announced prior to or in conjunction with the closing of the merger.

DowDuPont will be dual headquartered in Midland, Michigan and Wilmington, Delaware.

The merger transaction is expected to close in the second half of 2016, subject to customary closing conditions.