Dow Chemical Co., looking to sell low-margin units, agreed to merge most of its chlorine business with Olin Corp. in a $5 billion deal.

The tax-efficient, so-called Reverse Morris Trust transaction will leave shareholders of Midland, Michigan-based Dow with a 50.5 percent stake in Olin, the two companies said Friday in a statement. Olin investors will own the rest.

Dow Chairman and Chief Executive Officer Andrew Liveris said in 2014 there are “no sacred cows” in the company’s quest for cost savings, citing its intention to look for buyers for the 118-year-old chlorine business.

The company has come under pressure in the last year from activist investor Dan Loeb, who has called for Dow to spin off its petrochemicals business. In November, Dow agreed to give Loeb’s hedge fund Third Point LLC two seats on the company’s board, along with two other independent directors, avoiding a proxy fight with Third Point.

The Olin deal means Dow will exceed its target of selling $7 billion to $8.5 billion of assets, Livers said in Friday’s statement.

Shares of Dow, the largest U.S. chemical company, jumped in pre-market trading and were up 6.2 percent at $49.30 at 7.24 a.m. while Olin gained 21 percent to $33.

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