Dow Chemical to Sell Chlorine Business to Olin Corp for USD5bn

Dow Chemical Co, an American multinational chemical corporation headquartered in Midland, Michigan, has agreed to sell a significant part of its chlorine business to Olin Corp.

Olin, a manufacturer of ammunition, chlorine and sodium hydroxide based in Clayton Missouri, will pay US$2 billion of cash and cash equivalents to Dow; an estimated US$2.2 billion in Olin common stock and about US$800 million of pension assumptions and other liabilities.

In return, Dow, based in Midland, Mich., will transfer its chlor-alkali and vinyl plants along the U.S. Gulf Coast, its global chlorinated organics business and the global epoxy business. Dow will become one of Olin’s largest chlorine customers.

Dow CEO Andrew Liveris said the deal helped his company exceed its target to sell off US$7 billion to US$8.5 billion of non-vital businesses and assets.

“Our drive is to get better, not bigger,”Liveris said in an interview. Moving much of the chlor-aklali business out of its portfolio will help Dow “move up the value chain,” he said.

The deal also means that Dow shareholders will receive about 50.5% of Olin’s stock, while Olin shareholders will own about 49.5 percent.

“It’s a game changer,” Olin Chairman and CEO Joseph Rupp said in a conference call with analysts Friday morning. The acquisition “allows us to take our business to an entirely new level,” he said.