MOSCOW (MRC) -- Dow Chemical has announced that it will become the 100% owner of Dow Corning, which is currently a 50-50 joint venture with Corning, said Chemweek.
Dow and Corning will maintain their current equity stake in Hemlock Semiconductor Group, Dow says. "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," says Andrew Liveris, Dow's chairman and CEO.
"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," Liveris says. "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 competences across key chemistries," he adds.
The transaction is expected to yield more than USD1 billion in additional annual Ebitda at full run-rate synergies, and is expected to be accretive to operating earnings per share, cash flow from operations, and free cash flow in the first full year after closure of the transaction, Dow says. The company also says it is positioned to capture USD400 million in run rate annual cost and growth synergies from the restructured ownership of Dow Corning.
The transaction is expected to close in the first half of 2016, and is subject to the customary closing conditions, including relevant tax options and regulatory approvals, Dow says. Dow Corning's corporate headquarters will remain in Auburn, MI.
As MRC informed earlier, Dow Chemical Company plans to complete a debottlenecking project at its Freeport, Texas facility to increase capacity for glycidyl methacrylate (GMA) in the second quarter of 2016. The wide use of GMA, a versatile monomer for specialty coatings and resins, has placed increased demand on the product, tightening the market.
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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