Merger of Equals
A combination of two similarly sized companies structured as a partnership of peers with shared governance and leadership.
What is Merger of Equals?
A merger of equals is a combination of two companies of similar size, market capitalization, and strategic importance, structured and presented as a partnership rather than an acquisition of one by the other. These transactions typically use a stock-for-stock structure so neither side pays a cash premium, and governance arrangements reflect the supposed equality—often featuring co-CEOs, balanced board representation, and dual or joint headquarters. The rationale is usually cost synergies, combined scale, and complementary capabilities. In practice, true mergers of equals are uncommon: integration demands clear decision-making authority, and over time one company's culture and management team typically dominate the combined entity, regardless of the initial equal-partner framing.
Example
In December 2015, Dow Chemical Company and E.I. du Pont de Nemours and Company announced a 'merger of equals' to form DowDuPont Inc., combining two of the world's largest chemical companies with a combined enterprise value of approximately $130 billion. The deal, structured as an all-stock transaction, featured Andrew Liveris (Dow's CEO) as executive chairman and Edward Breen (DuPont's CEO) as CEO of the combined entity. DowDuPont subsequently split into three separate, focused companies—Dow, DuPont, and Corteva Agriscience—between 2019 and 2020.
Source: SEC EDGAR — DowDuPont Filings