MOSCOW (MRC) -- The Dow Chemical Company has announced the successful completion of the transaction to restructure the ownership of Dow Corning, said the producer in its press release.
Dow is now 100% owner of Dow Corning's silicones business, which had 2015 revenues of greater than USD4.5 bln and is expected to generate more than USD1 bln of annual EBITDA for Dow at full run-rate synergies.
The transaction represents a post-synergy multiple of less than 6x EBITDA, highlighting the unique value creation to Dow shareholders from acquiring 50% of the silicones business while benefiting from 100% of the synergies.
Dow Corning's world-leading silicone position brings a complementary new chemistry and technology to Dow, with it being a hand-in-glove, strategic fit for our material sciences portfolio and based on the additional one billion of EBITDA to Dow's bottom line at full run rate synergies, which at USD400 million is the minimum we expect to achieve, this transaction is highly accretive for our shareholders.
"As an owner of Dow Corning for more than seven decades, our deep understanding of common and adjacent markets we serve will enable us to go narrower and deeper into high growth businesses where innovation is rewarded with value," said Andrew N. Liveris, Dow's chairman and chief executive officer. "By linking our two robust innovation engines, we will bring greater value to our shareholders and a wider range of differentiated, high value solutions to our customers."
Dow Corning was previously a 73-year 50:50 joint venture between Dow and Corning Incorporated. Dow and Corning will maintain their equal proportional equity interests in Hemlock Semiconductor Group, a polysilicon producer in which Dow Corning was the majority shareholder.
The highly synergistic transaction extends Dow's participation in its Consumer Solutions and Infrastructure Solutions segments, providing immediate integration into Dow's monomer and polymer value chains. It also enables Dow to provide complementary technology offerings in attractive industry segments, such as building and construction, consumer care, transportation, packaging, and electronics.
As MRC wrote before, in April 2016, the film extruder Transilwrap Co. Inc. bought the specialty films business of Dow Chemical Co. for an undisclosed price. The deal includes production plants in Hebron, Ohio, and Drusenheim, France. The business makes films based on polyethylene (PE), polypropylene (PE) and polystyrene (PS) for numerous medical and packaging applications such as beverage closer liners, ostomy bags, window envelope films, labels and protective fabrics.
The Dow Chemical Company is an American multinational chemical corporation headquartered in Midland, Michigan, United States. Dow is a large producer of plastics, including polystyrene, polyurethane, polyethylene, polypropylene, and synthetic rubber.
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