- Dow commences its exchange offer for
the split-off of a significant portion of its chlorine value chain,
representing an important milestone in the proposed transaction
with Olin, which will create an industry leader in chlor-alkali and
derivatives with revenues approaching $7 billion.
- This exchange offer allows Dow
shareholders to exchange their shares of Dow common stock for Blue
Cube Spinco Inc. (“Splitco”) common stock, which will convert into
shares of Olin common stock upon completion of the proposed
transaction, providing Dow shareholders with the opportunity to own
shares in the combined company, which expects to benefit from
annualized cost synergies of at least $200 million.
- The transaction is structured in a tax
efficient manner, which maximizes shareholder value and is highly
complementary to the strategic objectives of both companies.
The Dow Chemical Company (NYSE: DOW) (“Dow”) announced today
that it has commenced its exchange offer for the split-off of a
significant portion of its chlorine value chain. The split-off
transaction is the next step in the separation, from Dow, of its
U.S. Gulf Coast Chlor-Alkali and Vinyl, Global Chlorinated Organics
and Global Epoxy businesses. The exchange offer provides Dow
shareholders with the opportunity to exchange their shares of Dow
common stock for shares of Blue Cube Spinco Inc. (“Splitco”) common
stock, which will convert into shares of Olin common stock upon
completion of the proposed transaction. The exchange is expected to
be tax-free to participating Dow shareholders for U.S. federal
income tax purposes.
“This landmark transaction is the latest in a series of
milestones we have achieved that enables Dow to significantly
exceed our collective divestiture targets, and enables Olin to
create a premier chlor-alkali and derivatives company with the
scope and capabilities to leverage long-term growth opportunities
and generate significant shareholder value,” said Andrew N.
Liveris, Dow’s chairman and chief executive officer. "This exchange
offer is designed to maximize total shareholder return through the
ability to own shares in the combined company, which is expected to
benefit from substantial synergies and create significant benefits
for customers."
Key elements of the exchange offer:
- Dow is offering to exchange all shares
of common stock of Blue Cube Spinco Inc. (“Splitco”), a wholly
owned subsidiary of Dow, for shares of common stock of Dow that are
validly tendered and not properly withdrawn.
- Dow shareholders have the option to
exchange all, some or none of their shares of Dow common stock for
shares of Splitco common stock, subject to proration as described
below. Shares of Splitco common stock will automatically convert
into the right to receive 0.87482759 shares of Olin common stock at
the closing of the merger of an Olin subsidiary with and into
Splitco, which is expected to occur promptly after completion of
the exchange offer.
- Tendering Dow shareholders are expected
to receive approximately $1.11 of Splitco common stock for every
$1.00 of Dow common shares tendered and accepted in the exchange
offer, subject to the upper limit described below.
- Dow will determine the ratio at which
shares of Dow common stock and Splitco common stock will be
exchanged by reference to the simple arithmetic average of the
daily volume-weighted average prices of shares of Dow common stock
and Olin common stock on the New York Stock Exchange on each of
three valuation dates at the end of the exchange offer.
- Dow expects to issue 100,000,000 shares
of Splitco common stock in the exchange offer. The number of shares
of Dow common stock that will be accepted in the exchange offer
will depend on the final exchange ratio and the number of shares of
Dow common stock tendered.
- The exchange offer and withdrawal
rights are scheduled to expire at 8:00 a.m., New York City time, on
October 1, 2015, unless the exchange offer is extended or
terminated.
- Splitco common stock will not be
transferred to participants in this exchange offer; such
participants will instead receive shares of Olin common stock in
the Merger. No trading market currently exists or will ever exist
for shares of Splitco common stock.
This exchange offer is designed to permit Dow shareholders to
exchange their shares of Dow common stock for Splitco common stock
(which will convert into shares of Olin common stock) at a 10%
discount in value, calculated as set forth in the exchange offer
materials sent to Dow shareholders, subject to an upper limit as
described below. This discount means that tendering Dow
shareholders are expected to receive approximately $1.11 of Splitco
common stock for every $1.00 of Dow common stock tendered and
accepted in the exchange offer, subject to an upper limit. The
upper limit in the exchange offer will be 2.9318 shares of Splitco
common stock equivalent to 2.5648 shares of Olin common stock
(based on the 0.87482759 shares of Olin common stock into which
each share of Splitco common stock will convert) for each share of
Dow common stock tendered and accepted in the exchange offer.
If the upper limit is in effect, then the exchange ratio will be
fixed at that limit and this exchange offer will be subject to a
mandatory extension of two trading days following the originally
contemplated expiration date, as described in the exchange offer
materials sent to Dow shareholders.
The final exchange ratio determining the number of shares of
Splitco common stock participating shareholders will receive for
each share of Dow common stock accepted in the exchange offer will
be announced in a press release no later than 4:30 p.m., New York
City time, on the last trading day prior to the expiration date
(unless the exchange offer is extended). The exchange offer will
expire at 8:00 a.m., New York City time, on October 1, 2015, unless
terminated or extended.
Immediately following the consummation of the exchange offer, a
special purpose merger subsidiary of Olin named Blue Cube
Acquisition Corp. (“Merger Sub”) will be merged with and into
Splitco, and Splitco, as the surviving company, will become a
wholly owned subsidiary of Olin (the “Merger”). In the Merger, each
issued and outstanding share of Splitco common stock will be
converted into the right to receive 0.87482759 shares of Olin
common stock. Accordingly, shares of Splitco common stock will not
be transferred to participants in the exchange offer; such
participants will instead receive shares of Olin common stock in
the Merger. No trading market currently exists or will ever exist
for shares of Splitco common stock.
The exchange offer will be subject to proration if the exchange
offer is oversubscribed, and the number of shares accepted in the
exchange offer may be fewer than the number of shares tendered.
If the exchange offer is consummated but not fully subscribed,
the remaining Splitco common shares owned by Dow will be
distributed on a pro rata basis to Dow shareholders whose Dow
common stock remains outstanding after the consummation of the
exchange offer.
The transactions are subject to customary closing conditions,
including Olin shareholder approval. Olin has scheduled a meeting
of shareholders to be held on September 15, 2015, to approve the
issuance of Olin common stock in the transaction. As a result of
the exchange offer, the number of Dow’s outstanding shares will be
reduced.
Immediately after the Merger, approximately 52.7 percent of the
outstanding shares of Olin common stock are expected to be held by
pre-Merger holders of Splitco common stock and approximately 47.3
percent of the outstanding shares of Olin common stock are expected
to be held by pre-Merger holders of Olin common stock. The
transaction is expected to have a tax efficient consideration of $5
billion, and a taxable equivalent value of $8 billion to Dow and
Dow shareholders.
For more information about the proposed transaction, please
visit Dow’s website at www.dow.com. For more information about
Dow’s split-off exchange offer, please contact the information
agent, Georgeson.
About Dow
Dow (NYSE: DOW) combines the power of science and technology to
passionately innovate what is essential to human progress. The
Company is driving innovations that extract value from the
intersection of chemical, physical and biological sciences to help
address many of the world's most challenging problems such as the
need for clean water, clean energy generation and conservation, and
increasing agricultural productivity. Dow's integrated,
market-driven, industry-leading portfolio of specialty chemical,
advanced materials, agrosciences and plastics businesses delivers a
broad range of technology-based products and solutions to customers
in approximately 180 countries and in high-growth sectors such as
packaging, electronics, water, coatings and agriculture. In 2014,
Dow had annual sales of more than $58 billion and employed
approximately 53,000 people worldwide. The Company's more than
6,000 product families are manufactured at 201 sites in 35
countries across the globe. References to "Dow" or the "Company"
mean The Dow Chemical Company and its consolidated subsidiaries
unless otherwise expressly noted. More information about Dow can be
found at www.dow.com.
Forward-Looking Statements
Note: The forward looking statements contained in this document
involve risks and uncertainties that may affect TDCC’s operations,
markets, products, services, prices and other factors as discussed
in filings with the Securities and Exchange Commission (“SEC”).
These risks and uncertainties include, but are not limited to,
economic, competitive, legal, governmental and technological
factors. Accordingly, there is no assurance that TDCC’s
expectations will be realized. The Company assumes no obligation to
provide revisions to any forward looking statements should
circumstances change, except as otherwise required by securities
and other applicable laws. This document also contains statements
about TDCC’s agreement to separate a substantial portion of its
chlor-alkali and downstream derivatives business, distribute the
business to TDCC shareholders and then merge it with a subsidiary
of Olin Corporation (the “Transaction”). Many factors could cause
actual results to differ materially from these forward-looking
statements with respect to the Transaction, including risks
relating to the completion of the transaction on anticipated terms
and timing, including obtaining shareholder and regulatory
approvals, anticipated tax treatment, unforeseen liabilities,
future capital expenditures, revenues, expenses, earnings,
synergies, economic performance, indebtedness, financial condition,
losses, future prospects, business and management strategies for
the management, expansion and growth of the new combined company’s
operations, Olin’s ability to integrate the business successfully
and to achieve anticipated synergies, and the risk that disruptions
from the Transaction will harm TDCC’s or Olin’s business. While the
list of factors presented here is considered representative, no
such list should be considered to be a complete statement of all
potential risks and uncertainties. Unlisted factors may present
significant additional obstacles to the realization of forward
looking statements. Consequences of material differences in results
as compared with those anticipated in the forward-looking
statements could include, among other things, business disruption,
operational problems, financial loss, legal liability to third
parties and similar risks, any of which could have a material
adverse effect on TDCC’s or Olin’s consolidated financial
condition, results of operations or liquidity. TDCC does not assume
any obligation to provide revisions to any forward looking
statements should circumstances change, except as otherwise
required by securities and other applicable laws.
Important Notices and Additional Information
In connection with the proposed transaction, Splitco has filed a
registration statement on Form S-4/S-1 containing a prospectus and
Olin has filed a proxy statement on Schedule 14A and a registration
statement on Form S-4 containing a prospectus with the SEC.
INVESTORS AND SECURITY HOLDERS ARE ADVISED TO READ THE REGISTRATION
STATEMENTS/PROSPECTUSES AND PROXY STATEMENT AND ANY FURTHER
AMENDMENTS WHEN THEY BECOME AVAILABLE AS WELL AS ANY OTHER RELEVANT
DOCUMENTS WHEN THEY BECOME AVAILABLE, BECAUSE THEY CONTAIN
IMPORTANT INFORMATION ABOUT THE PARTIES AND THE PROPOSED
TRANSACTION. Investors and security holders may obtain a free copy
of the prospectuses and proxy statement (when available) and other
documents filed by TDCC, Splitco and Olin with the SEC at the SEC's
web site at http://www.sec.gov. Free copies of these documents and
any further amendments, once available, and each of the companies’
other filings with the SEC may also be obtained from the respective
companies by directing a written request to Olin at 190 Carondelet
Plaza, Clayton, MO 63105. Attention: Investor Relations or TDCC or
Splitco at The Dow Chemical Company, 2030 Dow Center, Midland,
Michigan 48674, Attention: Investor Relations.
This communication is not a solicitation of a proxy from any
investor or security holder. However, Olin, TDCC, and certain of
their respective directors, executive officers and other members of
management and employees, may be deemed to be participants in the
solicitation of proxies from shareholders of Olin in respect of the
proposed transaction under the rules of the SEC. Information
regarding Olin’s directors and executive officers is available in
Olin’s 2014 Annual Report on Form 10-K filed with the SEC on
February 25, 2015, and in its definitive proxy statement for its
annual meeting of shareholders filed March 4, 2015. Information
regarding TDCC’s directors and executive officers is available in
TDCC’s Annual Report on Form 10-K filed with the SEC on February
13, 2015, and in its definitive proxy statement for its annual
meeting of shareholders, filed March 27, 2015, and a supplement to
the proxy statement filed March 31, 2015. These documents can be
obtained free of charge from the sources indicated above. Other
information regarding the participants in the proxy solicitation
and a description of their direct and indirect interests, by
security holdings or otherwise, is contained in the registration
statements, prospectuses and proxy statement and other relevant
materials filed with the SEC.
This communication shall not constitute an offer to sell or the
solicitation of an offer to sell or the solicitation of an offer to
buy any securities, nor shall there be any sale of securities in
any jurisdiction in which such offer, solicitation or sale would be
unlawful prior to registration or qualification under the
securities laws of any such jurisdiction. No offer of securities
shall be made except by means of a prospectus meeting the
requirements of Section 10 of the Securities Act of 1933, as
amended.
®TM Trademark of The Dow Chemical Company (“Dow”) or an
affiliated company of Dow
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version on businesswire.com: http://www.businesswire.com/news/home/20150902006378/en/
The Dow Chemical CompanyEmily
Parenteau+1-989-636-7904ebparenteau@dow.comInformation
Agent:Georgeson+1-888-566-8006+1-781-575-3340
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