Wall Street woke up to yet another big M&A headline on Friday morning, as chemical giants Dow and DuPont have agreed to join their combined $130 billion in market cap into a single entity before splitting the assets into three different companies. The new agriculture company would likely have a combined revenue of $19 billion, the material science company $51 billion and the specialty products company $13 billion.

Benzinga had the chance to speak with Chris Pultz, manager of the Kellner Investor Fund, about the impact of the proposed merger.

Arbitrage Opportunity

When Benzinga asked Pultz about arbitrage opportunities, a specialty of Kellner Capital, he said the spread for this deal will likely be relatively small.

“I wouldn’t say tight, but maybe tighter than it [typically] would be for a deal this size just because it is going to be done as a merger of equals, so we’ll have to see where it shakes out. It will probably be able to be played from both ways, either being long the Dow and short the DuPont or vice versa,” he explained.

Regulatory Scrutiny

Although any deal this size faces intense regulatory scrutiny, Kellner believes…

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