Dow To Reduce Approx. 2,500 Positions; Increases Synergy Capture To $500 Mln

(RTTNews) - The Dow Chemical Company (DOW) announced a series of actions to achieve synergy capture from the restructuring of its ownership of the Dow Corning Corporation. The collective actions will result in a reduction of approximately 2,500 positions globally, or approximately four percent of Dow's workforce. The company will take a charge of approximately $410 million to $460 million in the second quarter of 2016. Dow said these actions position the company to achieve cost synergy target run rate of 70 percent within 12 months of closing the Dow Corning transaction, and 100 percent within 24 months.

Dow stated that the company is uniquely positioned to capture $500 million in combined run rate annual synergies as a result of the restructured ownership of the Dow Corning Corporation - consisting of $400 million in cost synergies, an increase from the previously stated $300 million target, and $100 million in growth synergies - and expects to achieve $1 billion of additional annual EBITDA at full run-rate. The company said 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.

Dow will shut down silicones manufacturing facilities in Greensboro, North Carolina, and Yamakita, Japan, as well as certain administrative, corporate and manufacturing facilities to further enhance competitiveness and streamline costs associated with the transaction.