Consolidation is a regular happening in a growing economy, and the chemical industry, in particular, has seen a lot of merger and acquisition activity in recent years. In one of the biggest combinations, Dow Chemical and DuPont joined forces to create DowDuPont (NYSE:DWDP), but the merged industrial giant is expected to remain in its current form for only a short time. The next step in the ongoing evolution of the company will be to break it up into three component pieces, focusing on various parts of its joint business.

When the breakup happens, shareholders should expect the stock to split into three parts, as well. Both Dow and DuPont have done stock splits in the past, but they've tended to be more conventional moves that take their existing shares and simply create more of them. Let's look closely at the stock-split histories for Dow and DuPont, and then turn to what the merged company sees ahead.

Dow's and DuPont's histories of stock splits

Here are the dates and split ratios for the stock splits that Dow Chemical has done in the past:

Date of Split

Split Ratio

July 23, 1947

4 for 1

Sept. 16, 1952

3 for 1

Aug. 6, 1971

3 for 2

May 10, 1973

2 for 1

June 8, 1976

2 for 1

Nov. 21, 1989

3 for 2

June 19, 2000

3 for 1

Data source: DowDuPont investor relations.

These are the dates and ratios for DuPont's stock splits:

Date of Split

Split Ratio

Oct. 28, 1926

2 for 1

Jan. 21, 1929

7 for 2

June 15, 1949

4 for 1

June 29, 1979

3 for 1

Jan. 22, 1990

3 for 1

June 13, 1997

2 for 1

Data source: DowDuPont investor relations.

Neither company had given investors any stock splits in the recent past before their recent merger. You have to go back nearly 20 years to see any stock-split activity. In Dow's case, that stems largely from the fact that the share price struggled throughout the decade of the 2000s, only perking up in the past few years. DuPont also hadn't seen prices for its stock that would have warranted a split.

Building covered in blue Dow thermal protection wrap.

Image source: DowDuPont.

The merger and the coming split

Conglomerates have been under pressure recently, with few getting the value from investors in the market that their component parts would suggest is appropriate. That's one reason why DowDuPont now is looking to break itself up into three independent companies. By doing so, the chemical giant hopes that each new business will be able to focus more sharply on making the most of its own individual opportunities.

Specifically, DowDuPont's three split-off companies will consist of the combined businesses of legacy Dow Chemical and DuPont in key areas. One will focus on materials science, which will include most of the basic chemicals and polymers that both companies produce. The agricultural business will bring together the seeds, traits, and crop-protection assets that Dow and DuPont developed independently. Finally, the specialty products business will give investors exposure to applications in transportation, electronics, biosciences, and safety and construction.

DowDuPont has high hopes for all three businesses. In materials science, the company sees the greatest potential in the areas of packaging, infrastructure, and consumer care. The agriculture division will offer a complete portfolio of crop protection, germplasm, and trait products and technologies, with continuing research and development to ensure that the company keeps up with the fast pace of innovation in the space.

Specialty products will include a wider range of applications. Photovoltaic and semiconductor development will be one area of interest, as will helping to refine and improve industrial capacity to bolster productivity for biotechnology and bioengineering clients. The unit will be able to produce nutritional and health-fostering ingredients and manufacture protective garments. It sees itself continuing to make high-performance polymers for transportation, electronics, and medical-based use.

When to expect stock splits from DowDuPont

DowDuPont expects the breakup to occur in 2019. Until then, there's no reason for DowDuPont to consider a more conventional stock split, because the final share prices of the three separate businesses will be what's important going forward. After the split, investors can choose whether they want to hang onto all three businesses or keep only the areas that they find particularly interesting.

Dan Caplinger has no position in any of the stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy.