Dow, Olin chlor-alkali, derivatives deal gets favourable IRS ruling

Dow, Olin chlor-alkali, derivatives deal gets favourable IRS ruling

9:40 AM, 19th July 2015
Dow, Olin chlor-alkali, derivatives deal gets favourable IRS ruling
Andrew Liveris, Dow’s chairman and CEO. (File photo)

MIDLAND, US: The Dow Chemical Company said that it has received a favourable private letter ruling from the US Internal Revenue Service with respect to the proposed transaction involving a significant portion of Dow’s chlorine value chain and Olin Corporation.

The next transaction milestone is Olin shareholder approval. The transaction is expected to close by the end of 2015.

“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,” said Andrew Liveris, Dow’s chairman and CEO.

On 27 March, Dow and Olin entered into a definitive agreement under which Dow will separate its US Gulf Coast chlor-alkali and vinyl, global chlorinated organics and global epoxy businesses, and then merge these businesses with Olin in a Reverse Morris Trust transaction. The merger will result in Dow shareholders receiving at least a majority of the shares of Olin, with existing Olin shareholders owning the remaining shares. The transaction has a tax efficient consideration of $5 billion, and a taxable equivalent value of $8 billion to Dow and Dow shareholders.

“We are progressing toward our vision of becoming a low-cost global leader in chlor-alkali and derivatives and expanding our geographic and end-use market presence through an expanded portfolio and advantaged feedstocks,” said Joseph Rupp, Olin’s chairman and CEO.

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