Corporate Merger Dow Gets Green Light for Merger with Olin
Dow Chemical will conflate a share of its chlorine- and value chain with Olin, to save money in billions through a special law and tax construction.
Midland, Michigan/USA – After it got the approval by the U.S.-American tax authority, Internal Revenue Service (IRS), Dow will cut his departments U.S. Gulf Coast Chlor-Alkali and Vinyl, Global Chlorinated Organics and Global Epoxy and merge them with Olin. This is necessary for a law and tax construction called Reverse Morris Trust Transaction and will save billions in taxes for the companies.
As consequence of the merge the Dow shareholder will gain a majority of the Olin shares, while Olin-shareholder will keep the rest. The construction has a tax-efficiency of $5 billion, furthermore a taxing equivalent value of $8 billion for shareholders of Dow and Olin.
Joseph D. Rupp, Olin´s chairman and chief executive officer says: “We are progressing toward our vision of becoming a low-cost global leader in chlor-alkali and derivatives”.
Chairman and executive officer of Dow, Andrew M. Liveris is similar optimistic about the merge: “We are pleased to see this strategically significant transaction moving forward on schedule” continuing “this milestone underscores our ability to achieve tax efficiency for this landmark transaction that will enhance value for both Dow and Olin shareholders and advance Dow´s portfolio transformation”.
On March the 27th, 2015 the companies announced the signing of a contract as groundwork for the transaction. The next step to a successful completion of the corporate takeover is the confirmation by the Olin shareholders. It is expected that the transaction will be completed by the end of 2015. This depends largely on the fulfillment of the customary closing conditions by the companies. However all the necessary cartel-regulatory permissions have been granted for the merge.