The past year has seen the announcement of several mega-mergers in the corporate world. The proposed combination of AT&T and Time Warner has probably gotten the most attention in recent months, given its impact on the communications world.

But another gargantuan deal with a similar potential to reshape the corporate landscape is the proposed merger of two of the world's three biggest chemical companies -- Dow Chemical(DOW) - Get Report and DuPont (DD) - Get Report . Shares of both companies fell slightly in Tuesday trading. 

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If the deal goes through -- it still has to be approved by the European Union as well as U.S. officials -- it will create a powerhouse that will thoroughly dominate the worldwide chemicals market, dwarfing even such formidable competitors as BASF and Monsanto.

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One way the two companies could win antitrust approval is to sell off a few of their existing assets, while retaining the core businesses that make the companies great. Bloomberg reported this month that Dow is seeking a buyer for its copolymers business to ease regulators' concerns. Meanwhile, DuPont is looking to shed its herbicides business.

Even in the event that the deal is blocked or falls through, Dow Chemical will remain a top-flight company that is worth owning in its own right. Over its long history, the company has offered strong returns, in the form of both dividends and capital gains. Its current yield is 3.43%, and its price-earnings ratio is under 10.

Dow is one of the oldest companies in the Fortune 500, founded back in 1897. But its management has shown a bold willingness to adapt to the realities of the 21st century, with the DuPont deal being only the latest example.

Dow is a large producer of plastics, including polystyrene, polyurethane, polyethylene, polypropylene, and synthetic rubber. It also produces agricultural chemicals, including the pesticide Lorsban and consumer products such as Styrofoam.

In recent years Dow has been increasing its "vertical integration," controlling more of its own supply chains and distribution networks. Ethylene is one of the necessary components of its plastics output. Dow now manufactures more than 85% of the ethylene it uses.

Additionally, the agriculture technology company Chromatin recently made an agreement to use unique sorghum genetic stocks developed by Dow AgroSciences LLC, a Dow subsidiary that had global sales of $6.4 billion in 2015. Chromatin is deploying the technology to launch new, market-leading products in multiple key sorghum markets outside of the United States.


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Thoma Scarlett is an independent contributor who at the time of publication owned none of the stocks mentioned.