Dow Chemical higher by 6% on spin-off/combination of unit with OLN; currently trading around $49.50
Olin: Dow Chemical (DOW) announces spinoff of chlor-alkali and downstream derivatives businesses to combine with Olin Corporation (OLN); transaction is valued at $5 billion
- Dow announces it will separate a significant portion of its chlor-alkali and downstream derivatives businesses and merge them with Olin (OLN) in a tax-efficient Reverse Morris Trust transaction that creates an industry leader with revenues approaching $7 billion;
- The transaction is valued at $5 billion, and includes $2.0 billion of cash and cash equivalents to be paid to Dow; an estimated $2.2 billion in Olin common stock using the Olin stock value as of close on March 25, 2015; and approximately $800 million of assumption of pension and other liabilities.
- Olin expects to achieve annualized cost synergies of a minimum of $200 million, which are anticipated to be fully realized within 36 months.
- Transaction is highly accretive to Dow and Dow shareholders, with a tax efficient consideration of $5 billion, and a taxable equivalent value of $8 billion.