Over the course of the next two years, the parties intend to pursue a separation of DowDuPont into three independent, publicly traded companies for three specific sectors: Agriculture, Material Science and Technology.

Nonetheless, the announcement – which will see Dow shareholders take over 52% of the combined company, and DuPont investors 48% – failed to support the companies’ shares, which had already risen in anticipation of the tie-up.

Dow’s CEO Andrew Liveris will be executive chairman of the new company, with DuPont CEO Edward Breen keeping the CEO title upon completion of the deal, which the companies billed as a merger of equals.

The companies expect to find $1.3 billion in cost synergies within the combined agriculture company. An additional upside of approximately 1 billion dollars is expected from growth synergies.

Shares of Dow and DuPont are both trading down more than 4 percent in Friday trading.

Antitrust regulators may look favorably on the deal given the three-way split, but, ultimately, must determine how the merger will affect competition among various markets involved.

In a statement Friday, DuPont said the transaction simplifies the company’s structure because it will operate fewer but larger business units rather than several smaller segments.

Dow said it is taking full ownership of Dow Corning, now a 50-50 joint venture between Dow and Corning. The transaction, expected to be completed in the first half of 2016, will increase the company’s product offerings in industries such as construction, consumer care and automobiles.

“The merger puts together a company that is strong on the seed side with Pioneer and strong on the chemical side with Dow“, said Chad Hart, an Iowa State University agricultural economist.

DowDuPont is a merger of equals, with shareholders of each company holding roughly 50 percent of the new one, and will form the world’s second-largest chemical company by revenue, after Germany’s BASF.

The all-share deal will eventually lead to the merged company, initially to be called DowDuPont, being split in three.

“This merger makes so much strategic sense”, Jonas Oxgaard, an analyst with Sanford Bernstein, said after reports earlier this week signaled the deal was coming. The combined company will be called Dow DuPont, and the restructuring will have a big impact on the thousands of people in our area who work for both companies.

Activist investor Nelson Peltz has been pressing DuPont to separate its agriculture, nutrition and biosciences units from its building and safety materials divisions.

The business is expected to supply more than 40% of the corn seed market, and slightly less of the soybean seed market. Breen and Liveris will serve on the board along with two co-lead directors. He added that the material science company is the most likely branch to hang on in DE, if at all (the committee will be headed by Liveris), because DuPont has the employees and facilities at its Chestnut Run office complex to do the job.