The Dow Chemical Co. (NYSE: DOW – $56.68), is testing a new all-time high following word that it is in talks with rival DuPont & Co. to join forces in the highly-competitive performance chemical and agricultural products markets. Early chatter has the two companies ultimately splitting the proposed $90 billion sales giant into three separate publicly held companies each focusing on agriculture, material sciences and specialty products. Such a combination will certainly draw scrutiny from the Department of Justice, which has recently nixed several No. 1 and No. 2 tie ups. Also, Basel, Switzerland’s Sygenta and Monsanto Co, which are both anxious to gain market share in the seed and pesticide businesses, may make a counter offer for DuPont. Should such a deal materialize, the merger and subsequent divestitures could take years to complete. For now, I will maintain my position in Dow Chemical in the income portfolio, but the shares are liable to remain volatile and possibly slip back to the low 50’s should discussions fall apart.