Business News

Dow Chemical Sells Chlorine Business To Olin In $5 Billion Deal

dow chemical deal

Dow Chemical made the latest step to streamline its business due to pressure from activist investor Daniel Loeb by announcing on Friday that it will separate its chlorine business and merge it with Olin Corporation.

The deal will bring in $5 billion to Dow Chemical, including around $2 billion in cash, as the deal is structured as a Reverse Morris Trust transaction. The larger Olin Corp will have about $7 billion in revenue.

Dow will shed its United States Gulf Coast chlor-alkali and vinyl, global epoxy and global chlorinated organics to merge them with Olin, the New York Times reported.

[quote text_size=”small” author=”– Andrew Liveris” author_title=”Dow Chief Executive”]

With this transaction, we will exceed our target to divest $7 billion to $8.5 billion of nonstrategic 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.


This comes just months after Dow agreed to add four new independent directors to the board after an escalating fight between Dow and Third Point, the hedge fund managed by Loeb. To avoid a proxy battle, Loeb had set up a website criticizing Dow’s management and its chief executive, Andrew Liveris. Liveris, however, noted in the announcement that plans to shed the chlorine business were announced prior to Loeb taking a stake in the company.

In a conference call with investors, Liveris said the deal proves that “Dow continues to behave as our own, best activist,” a clear dig at Loeb, who has been pushing Dow for over a year to split the company into separate plastics and petrochemicals businesses, Forbes reported.

In the deal, Dow will receive the cash equivalent of $2 billion, the two companies will swap debt worth about $1.15 billion, and Dow will receive 50.5% of Olin common stock that is valued at $2.2 billion. Olin, meanwhile, will assume $800 million of Dow debt and pension obligations.

Dow shares surged over 3% after the announcement, boosting the company’s market value by almost $2 billion. Olin shares climbed 20%, boosting the company’s worth by over $400 million.

Click to comment
To Top

Hi - Get Important Content Like This Delivered Directly To You

Get important content and more delivered to you once or twice a week.

We don't want an impostor using your email address so please look for an email from us and click the link to confirm your email address.