Dow Chemical Co. and the DuPont Co. said Friday that they would combine in a "tax-free merger" into one company, DowDuPont, and then split into three separate firms.

They plan to cut at least $3 billion in yearly expenses, shut offices and plants, and lay off thousands of workers, in the hope of driving up share prices and enriching investors.

DuPont, based in Wilmington, also said Friday that even before the merger, it will displace around 5,400 of its 54,000 global employees.

CEO Edward D. Breen plans to cut $700 million from spending next year, and pay $650 million for severance to thousands of workers who will lose their jobs, plus $130 million for plant shutdowns.

The companies, which together are worth $130 billion on the stock market, employ around 100,000 worldwide, including almost 10,000 in the Philadelphia area.

The move joins two more-than-100-year-old firms that grew rich acquiring chemical patents and developing products they sold to armies, farms, factories, households, and governments worldwide. They also employ hundreds of thousands of professionals and skilled workers.

Dow boss Andrew N. Liveris will be the combined firms' executive chairman. Breen will keep the CEO title at the combined companies.

In remarks to investors, the men said they had used advice from corporate raiders Daniel Loeb of the Third Point hedge fund group, which owns 2 percent of Dow, and Nelson Peltz of the Trian hedge fund group, which owns 3 percent of DuPont, in designing the split-up, which they hope to conclude by late 2017.

Loeb and Peltz had expressed impatience with the chemical giants' large management structures and the hard-to-measure benefits of scientific research and product development, and called for asset sales and cost cuts that will make it easier for them to extract cash.

DuPont, founded in 1802, was famed for developing explosives and nylon. It makes thousands of products, including Corian for countertops, Kevlar in protective clothing, and Tyvek insulation. Founded in 1897, Dow makes products that include Styrofoam, Liquid Armour, and carbowax. It bought Philadelphia's Rohm & Haas Co. in 2009, but last year shut its former division headquarters in Center City Philadelphia.

While officials at the companies' pesticide competitors, including Sygenta, Monsanto, and FMC, have described potential merger talks as near-universal due to falling global demand, Liveris told investors that DuPont and Dow directors have been in talks since last winter, when Breen's predecessor, Ellen Kullman, was in charge.

Breen told investors after the deal was announced that he talked to Liveris about a possible merger on the day he took over as CEO in October.

The companies insisted theirs would be an unusual "merger of equals" rather than an acquisition. "This transaction is a game-changer for our industry and reflects the culmination of a vision we have had for more than a decade to bring together these two powerful innovation and material science leaders," Liveris said in a statement.

"This is an extraordinary opportunity to deliver long-term, sustainable shareholder value through the combination of two highly complementary global leaders and the creation of three strong, focused, industry-leading businesses," Breen said in a statement.

Under the merger terms, the companies said, Dow stockholders would get one share of the combined company for each of their shares, while DuPont shareholders would get 1.282 shares for each. With that share exchange ratio, DuPont shareholders would get $70.38 a share for their stock, or about $62 billion overall, based on Thursday's closing prices.

During the 2000s, Breen split up another conglomerate, Tyco International, in a series of deals.

The three new companies will include a $51 billion (yearly sales) "materials science" company selling plastics, chemicals, construction, and consumer products; a $19 billion pesticides and seeds company for agricultural products; and a $13 billion "specialty products" company focused on enzymes, safety, and electronics products.

Liveris, 61, will oversee the materials science company, which will keep the Dow name after reorganization. Breen, 59, will oversee the other two divisions. Wilmington and Midland, Mich., will be co-headquarters until the companies are split.

DuPont veterans in Wilmington say they expect the agriculture and materials businesses will likely be headquartered at Dow, and that the "specialty products" company is the most likely one to remain based in Delaware.

For now, DowDuPont plans to maintain both offices as "dual headquarters." The new board will include eight directors from each company. They have not yet been named.

DuPont is no stranger to mergers and spin-offs. Other former DuPont divisions or affiliates that are now separate companies based in the Philadelphia area include Axalta, Endo, and Incyte. Earlier this year, DuPont spun off money-losing chemical units into a new company, Chemours.

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