The embodiments herein relate to a method of synthesizing new improved reactive terpolymer, S-MMA-X (styrene/modified maleic anhydride/X) wherein X is any type of polymers. The method involves synthesizing styrene-modified maleic anhydride complex (SMMA) with the ability to react with all kinds of polymers to produce new reactive terpolymer with formation of nano particles inside them. The nanoparticle formations improve the physio-chemical, thermal and mechanical properties of the newly formed reactive terpolymer when compared to natural rubber, their derivatives, EPDM or other known polymer etc. Depending on the property of the end product polymers produced by the invention, the end use can be varied. In one embodiment, the polymer X is natural rubber (NR) and the end product terpolymer is used as bitumen modifier. In another embodiment, the polymer X is ethylene-propylene diene monomer (EPDM) and the end product terpolymer behaves like a smart particle and absorbs oil and water contaminants.