US company Dow Chemical Co (NYSE:DOW) is reportedly in talks to merge with DuPont (NYSE:DD) to create a chemicals giant worth over $120 billion, according to Reuters sources this morning.

First reported in the Wall Street Journal early on Tuesday, people familiar with the matter have said that as part of a major restructuring of both companies, a merger deal is on the table but has not yet been fully agreed. If it goes through, it will be one of the biggest mergers this year, with both Dow and DuPont having a market capitalisation of around $60 billion.

The deal is said to be a merger of equals, with the combined company sharing resources to branch into material sciences and agrochemicals. Dow and DuPont declined to comment.

Dow Chemicals and DuPont are two of America’s largest companies, both over a century old. The deal would face regulatory approval in several countries and is currently in the early stages of talks.

Dow Chemicals is currently trading down 2.17 percent on the news, with DuPont trading down 0.73 percent at 66.61 pence per share. (1042GMT).