Dow Chemical to split off chlorine business to Olin for $2 billion cash plus stock

By Lisa Kerner

Charlotte, N.C., March 27 – Dow Chemical Co. will separate its chlorine business and merge it with Olin Corp. in a transaction valued at about $5 billion.

The deal is structured as a Reverse Morris Trust transaction in which Olin will pay $2 billion of cash and cash equivalents to Dow. It also includes $2.2 billion of Olin common stock and the assumption of pension and other liabilities, according to a news release.

Dow shareholders will receive about 50.5% of the shares of Olin, and existing Olin shareholders will own the remaining 49.5%.

“We intend to execute this transaction as a split-off, with the split-off utilized to retire significant Dow shares,” said Andrew Liveris during a conference call on Friday. “The final decision to split off or spin off will be made prior to the close of the transaction depending on what will be in the best interests of our shareholders at that time.”

With the transaction, Dow will exceed its target to divest $7 billion to $8.5 billion of non-strategic businesses and assets, according to Liveris, allowing the company to have an “ongoing focus to continue to enhance shareholder remuneration, reduce debt and continue to invest in future growth in our high-priority and high-margin businesses.”

Dow Chemical is a Midland, Mich.-based specialty chemicals company.

Based in Clayton, Mo., Olin’s three main business segments are Chlor Alkali Products, Chemical Distribution and Winchester. Chlor Alkali Products produces chlorine and caustic soda, hydrochloric acid, hydrogen, bleach products and potassium hydroxide; Chemical Distribution manufactures bleach products and distributes caustic soda, bleach products, potassium hydroxide and hydrochloric acid; and Winchester produces and distributes sporting ammunition, law enforcement ammunition, reloading components, small-caliber military ammunition and components and industrial cartridges.

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