DOW
Merging chlor-alkali and downstream derivatives businesses with Olin / New industry leader is born
 Dow will maintain a majority stake in the “new” Olin (Photo: Dow) |
In line with plans announced in late 2013 (see Plasteurope.com of 05.12.2013), Dow Chemical (Midland, Michigan / USA; www.dow.com) in late March announced that it would separate its chlor-alkali and downstream derivatives businesses and merge them with Olin Corporation (Clayton, Missouri / USA, www.olin.com) under a Reverse Morris Trust transaction. The merger will create an industry leader with revenues of almost USD 7 bn, EBITDA of USD 1 bn – excluding synergies – and some 5.6m t/y in capacity for chlorine and related products. The transaction is still subject to a vote by Olin shareholders and is expected to close by the end of this year.
Once all the approvals have been received, Dow will hold a 50.5% stake in the “new” Olin, while the latter’s existing shareholders will remain in control of about 49.5%. Under a separate but additive agreement, Dow and Olin signed a 20-year capacity rights deal under the terms of which Dow will supply Olin with ethylene from its US Gulf Coast operations, allowing the latter “to be a sustainable integrated chlor-vinyl producer.” Olin will continue to be led by its existing CEO Joseph Rupp, supported by a senior management team comprised of both Dow and Olin employees.
The portfolio of the new Olin will be dominated by chlor-alkali and vinyls. The Clayton-based company also engages in chlorinated organics, epoxy and chemical distribution, and in addition is the owner of the Winchester brand of ammunitions. Its regional focus will be on North America, including plastics-related activities in the shape of EDC, VCM, phenol and BPA plants in Freeport, Texas, and Plaquemine, Louisiana. European activities include plants for epoxy and BPA in Stade / Germany as well as a cumene plant in Terneuzen / The Netherlands. Other European production facilities that will now switch to Olin are Baltringen and Rheinmünster / Germany as well as Pisticci / Italy.
Commenting on the agreement, and possibly taking a swipe at hedge fund Third Point (www.thirdpointpublic.com) – which has been pressing Dow to spin off its petrochemicals business (see Plasteurope.com of 23.01.2014) – CEO Andrew Liveris said, “With this transaction we will exceed our target to divest USD 7 bn to USD 8.5 bn of non-strategic businesses and assets. This achievement will allow us 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.”
e-Service:
Presentation on the “Combination of The Dow Chemical Company’s ‘Dow Chlorine Products’ with Olin” as a PDF file
Once all the approvals have been received, Dow will hold a 50.5% stake in the “new” Olin, while the latter’s existing shareholders will remain in control of about 49.5%. Under a separate but additive agreement, Dow and Olin signed a 20-year capacity rights deal under the terms of which Dow will supply Olin with ethylene from its US Gulf Coast operations, allowing the latter “to be a sustainable integrated chlor-vinyl producer.” Olin will continue to be led by its existing CEO Joseph Rupp, supported by a senior management team comprised of both Dow and Olin employees.
The portfolio of the new Olin will be dominated by chlor-alkali and vinyls. The Clayton-based company also engages in chlorinated organics, epoxy and chemical distribution, and in addition is the owner of the Winchester brand of ammunitions. Its regional focus will be on North America, including plastics-related activities in the shape of EDC, VCM, phenol and BPA plants in Freeport, Texas, and Plaquemine, Louisiana. European activities include plants for epoxy and BPA in Stade / Germany as well as a cumene plant in Terneuzen / The Netherlands. Other European production facilities that will now switch to Olin are Baltringen and Rheinmünster / Germany as well as Pisticci / Italy.
Commenting on the agreement, and possibly taking a swipe at hedge fund Third Point (www.thirdpointpublic.com) – which has been pressing Dow to spin off its petrochemicals business (see Plasteurope.com of 23.01.2014) – CEO Andrew Liveris said, “With this transaction we will exceed our target to divest USD 7 bn to USD 8.5 bn of non-strategic businesses and assets. This achievement will allow us 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.”
e-Service:
Presentation on the “Combination of The Dow Chemical Company’s ‘Dow Chlorine Products’ with Olin” as a PDF file
01.04.2015 Plasteurope.com [230889-0]
Published on 01.04.2015
German version of this article...