24th January 2019

DOW DOWNSIZES WORKFORCE FOR SYNERGIES

The Dow Chemical Co. is downsizing its workforce by 2,500. The company says this is to "achieve synergy capture and accelerate shareholder value creation from the restructuring of its ownership of Dow Corning Corp."

The company says it is positioned to capture $500-million in combined run rate annual synergies as a result of the restructured ownership. This consists of $400-million in cost synergies, an increase from the previously stated $300-million target, and $100 million in growth synergies. Further, it expects to achieve $1-billion of additional annual EBITDA at full run-rate. The transaction will also be accretive to operating earnings per share, cash flow from operations and free cash flow in the first full year after transaction close.

“We are moving quickly and effectively to integrate Dow Corning and deliver the synergies that will drive new levels of value creation for our customers and generate even greater returns for our shareholders,” said Andrew N. Liveris, Dow’s chairman and chief executive officer. “With these difficult but necessary actions, we are bringing together the best of each company’s talent and technology, accelerating Dow’s strategy to go narrower and deeper into attractive, targeted market sectors, and setting the stage for the new Dow – the world’s leading material science company.”

Dow will shut down silicones manufacturing facilities in Greensboro, NC, and Yamakita, Japan, as well as cut back on certain administrative, corporate and manufacturing facilities to further enhance competitiveness and streamline costs associated with the transaction. The workforce reduction represents approximately four percent of Dow’s workforce.

These changes come prior to the expected merger between Dow and DuPont. This was announced in December, and is expected to close in the second half of this year.

www.dow.com