USA: Synergies in the Silicones Business Dow Completes Strategic Ownership of Dow Corning
The Dow Chemical Company announced the successful completion of the transaction to restructure the ownership of Dow Corning. Dow now owns 100 % of Dow Corning’s silicones business, which had 2015 revenues of more than $ 4.5 billion.
Midland/USA – “Dow Corning’s world-leading silicone position brings a complementary new chemistry and technology to Dow, with it being a hand-in-glove, strategic fit for our material sciences portfolio and based on the additional $ 1 billion of Ebitda to Dow’s bottom line at full run-rate synergies, which at $ 400 million is the minimum we expect to achieve, this transaction is highly accretive for our shareholders. As an owner of Dow Corning for more than seven decades, our deep understanding of common and adjacent markets we serve will enable us to go narrower and deeper into high growth businesses where innovation is rewarded with value,” said Andrew N. Liveris, Dow’s chairman and chief executive officer. “By linking our two robust innovation engines, we will bring greater value to our shareholders and a wider range of differentiated, high value solutions to our customers.”
Dow Corning was previously a 73-year 50:50 joint venture between Dow and Corning Incorporated. Dow and Corning will maintain their equal proportional equity interests in Hemlock Semiconductor Group, a polysilicon producer in which Dow Corning was the majority shareholder.
The transaction extends Dow’s participation in its Consumer Solutions and Infrastructure Solutions segments, providing immediate integration into the company's monomer and polymer value chains. It also enables Dow to provide complementary technology offerings in industry segments such as building and construction, consumer care, transportation, packaging, and electronics.
Business Structure and Governance
Dow Corning will operate as a wholly owned subsidiary of Dow, and will be headquartered with Dow in Midland, Michigan.
Dow Vice Chairman and Chief Financial Officer Howard Ungerleider will serve as chairman of Dow Corning in addition to his current responsibilities. Dow Vice President Mauro Gregorio, who leads the Dow Corning integration team for Dow, will serve as chief executive officer of Dow Corning. Andy Tometich, a 27-year Dow Corning veteran, has been named business president of the silicones business.
“Dow Corning’s silicones technology platform is a natural fit within Dow. Together we share 73 years as joint venture partners,” said Mauro Gregorio. “And we also share a promising future of bringing new technologies and innovation to customers worldwide.”