MOSCOW (MRC) -- Dow Chemical announced the closing of the previously announced split-off transaction, resulting in the separation of a significant part of Dow’s chlor-alkali and downstream derivatives businesses and merger of these businesses with Olin Corporation to create an industry leader with revenues approaching USD7 billion, said the company on its site.
Transaction is highly accretive to Dow and Dow shareholders, with a tax-efficient consideration of greater than USD4.6 billion or taxable equivalent value in excess of USD7 billion to Dow and Dow shareholders.
Dow reduces outstanding shares of its common stock by more than 34 million shares; returns USD1.5 billion in value to shareholders through the split-off, effectively completing USD6.5 billion of its USD9.5 billion share repurchase program.
Dow exceeds divestiture target – reaching USD12 billion and further advancing the Company’s portfolio shift to select high-performance sectors. The two new directors were designated by Dow in connection with the Reverse Morris Trust transaction.
Joseph D. Rupp, Olin's Chairman and Chief Executive Officer, said, "The complementary combination of Dow's businesses with our business creates a world leader in chlorine-based products with significant global scale. Olin now is the largest integrated chlor-alkali producer with top-tier low-cost facilities and has significantly diversified its product and geographic base.
Included are Dow’s U.S. Gulf Coast Chlor-Alkali and Vinyl, Global Chlorinated Organics, and Global Epoxy business units, in addition to 100 percent interest in the Dow Mitsui Chlor-Alkali joint venture. The closing of the merger followed the expiration of the related exchange offer and the satisfaction of certain other conditions. As a result of the exchange offer, Dow will reduce outstanding shares of its common stock by more than 34 million shares or nearly 3 percent of outstanding common shares.
The transaction is highly accretive to Dow and Dow shareholders, with a tax-efficient consideration of greater than USD4.6 billion on an after-tax basis and taxable equivalent value in excess of USD7 billion.
With this transaction, Dow exceeds its prior stated goal to divest USD7 billion to USD8.5 billion of non-strategic businesses and assets by mid-2016, with the total now approaching more than USD12 billion in pre-tax proceeds.
As MRC informed before, this week, The Dow Chemical Company announced that it had commenced its exchange offer for the split-off of a significant portion of its chlorine value chain. The split-off transaction is the next step in the separation, from Dow, of its U.S. Gulf Coast Chlor-Alkali and Vinyl, Global Chlorinated Organics and Global Epoxy businesses. The exchange offer provides Dow shareholders with the opportunity to exchange their shares of Dow common stock for shares of Blue Cube Spinco Inc. (Splitco) common stock, which will convert into shares of Olin common stock upon completion of the proposed transaction. The exchange is expected to be tax-free to participating Dow shareholders for U.S. federal income tax purposes.
Olin Corporation manufactures chemicals and ammunition products. The Company manufactures and sells chlorine, caustic soda, sodium hydrosulfite, hydrochloric acid, hydrogen, sodium chlorate, bleach products, and potassium hydroxide. Olin also manufactures products that include sporting ammunition, reloading components, small caliber military ammunition and industrial cartridges.
The Dow Chemical Company is an American multinational chemical corporation. As of 2007, it is the second-largest chemical manufacturer in the world by revenue (after BASF) and as of February 2009, the third-largest chemical company in the world by market capitalization (after BASF and DuPont). Dow is a large producer of plastics, including polystyrene, polyurethane, polyethylene, polypropylene, and synthetic rubber.
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