Dow Chemical Acquires 100% Stake in Dow Corning

Expecting more than $1 billion in additional annual EBITDA at full run-rate synergies

·         Transaction is expected to yield more than $1 billion in additional annual EBITDA at full run-rate synergies and is expected to be accretive to Operating EPS, cash flow from operations and free cash flow in the first full year after the close of the transaction

·         Combination deepens Dow’s portfolio in attractive end use applications such as building and construction, consumer care, and automotive

The Dow Chemical Company announced the signing of definitive agreements to restructure the ownership of Dow Corning Corporation. Unanimously approved by Dow’s board of directors, the transaction is highly complementary to the strategic objectives of Dow and offers significant potential to enhance value for shareholders.

Under the terms of the agreement, Dow will become the 100 percent owner of Dow Corning, currently a 50:50 joint venture between Dow and Corning. Dow and Corning will maintain their current equity stake in Hemlock Semiconductor Group.

With Dow and Dow Corning coming together, Dow will extend its participation in Consumer Solutions and Infrastructure Solutions segments by increasing Dow’s product offerings in several attractive end use applications such as building and construction, consumer care, and automotive.

Dow is uniquely positioned to capture $400 million in run rate annual cost and growth synergies from the restructured ownership of Dow Corning. The transaction is expected to yield more than $1 billion in additional annual EBITDA at full run-rate synergies and is expected to be accretive to Operating EPS, cash flow from operations and free cash flow in the first full year after the close of the transaction.

The transaction structure enables Dow to maintain a net debt-to-equity ratio consistent with third quarter 2015 levels (prior to the closing of the sale of Dow’s U.S. Gulf Coast Chlor-Alkali and Vinyl, Global Chlorinated Organics, and Global Epoxy business units to Olin Corporation), in line with the Company’s focus of retaining an investment grade credit rating. The transaction is expected to close in the first half of 2016. Dow Corning’s corporate headquarters will remain in Auburn, Michigan.

"This transaction is another milestone aligned to Dow’s strategic agenda to provide clarity on our joint ventures and demonstrates our ongoing and relentless focus on creating shareholder value,” said Andrew N. Liveris, Dow’s chairman and chief executive officer. “Today represents the transition of a very successful 72-year partnership between Dow and Corning and our strong relationship with Corning will continue through Hemlock Semiconductor. Dow is the natural owner of Dow Corning. Fully aligned to our portfolio strategy, the addition of a silicones position will expand our product offerings across multiple businesses while driving innovative solutions that will enable us to go deeper into key end markets by leveraging Dow’s existing, strong science and engineering competencies across new chemistries."

"Today’s announcement represents the next step in the evolution of our portfolio to drive higher, more stable earnings with a world leading silicone technology platform,” said Howard Ungerleider, Dow’s vice chairman and chief financial officer. “It demonstrates our continued focus on investing in value streams that will deliver profitable growth aligned to high-margin end use markets."

The transaction is subject to customary closing conditions, including relevant tax opinions and regulatory approvals.

BofA Merrill Lynch and Klein and Company are serving as Dow’s financial advisors for the transaction. Shearman & Sterling LLP is serving as Dow’s legal counsel.

Dow and Corning will host a joint conference call and webcast today at 7:30 a.m. Eastern Time (U.S.) to discuss the transaction. Participants will include Dow’s chairman and CEO and Corning’s chairman and CEO. To access the audio webcast please visit the Investor Relations sections of Dow or Corning’s websites. For those unable to listen to the live broadcast, a replay will be available on both websites. A copy of the investor presentation will be made available on both companies’ Investor Relations websites.

Disclaimers of Warranties
1. The website does not warrant the following:
1.1 The services from the website meets your requirement;
1.2 The accuracy, completeness, or timeliness of the service;
1.3 The accuracy, reliability of conclusions drawn from using the service;
1.4 The accuracy, completeness, or timeliness, or security of any information that you download from the website
2. The services provided by the website is intended for your reference only. The website shall be not be responsible for investment decisions, damages, or other losses resulting from use of the website or the information contained therein<
Proprietary Rights
You may not reproduce, modify, create derivative works from, display, perform, publish, distribute, disseminate, broadcast or circulate to any third party, any materials contained on the services without the express prior written consent of the website or its legal owner.

Nichia’s Tunable 757 receives rave reviews from industry leaders, including the coveted LpS Best Sustainability Technology Award. Nichia, the leader in and inventor of the high-brightness LED, announced its game-changing single LES, tuna... READ MORE

Innovative tunable white, mid-power LED enables luminaire manufacturers to improve colour tuning, shrink optics and fixture profiles, while enabling new design options. Nichia, the leader in and inventor of the high-brightness LED, announces i... READ MORE