Dow Announces Divestiture of Morton Salt (4/2/09)

The Dow Chemical Co. recently announced that Rohm and Haas, a wholly owned subsidiary of The Dow Chemical Co., has entered into a definitive agreement to sell the stock of Morton International Inc., the salt business of Rohm and Haas, to K+S Aktiengesellschaft. K+S is one of the world's leading suppliers of specialty and standard fertilizers, plant care and salt products, and a German DAX 30 Company.

"We are pleased that we reached an agreement with K+S at an attractive value in such a short period of time," said Dow Chairman and CEO Andrew N. Liveris. "This sale puts us ahead of schedule on our de-leveraging plan post the close of the Rohm and Haas acquisition. It is the first of many steps designed to deliver on our clear and measurable plan to build value for our shareholders."

De-Leveraging Plan Ahead of Schedule
On April 1, Dow announced that it had completed its acquisition of Rohm and Haas, forming a leading global specialty chemicals and advanced materials company. The transaction values Morton International at $1.675 billion. Proceeds are subject to customary post-closing adjustments. The Morton Salt divestiture is not subject to a financing condition. The transaction is subject to customary closing conditions, including regulatory approval, and is expected to close in mid-2009.

The sale of Morton International is the next step in Dow's de-leveraging plan. The actions taken by the company since early January include:
  • Re-negotiated and extended the terms of the Rohm and Haas bridge loan.
  • Reduced the dividend by 64%, saving approximately $1.0 billion on an annualized basis.
  • Negotiated for more favorable terms in connection with the Rohm and Haas transaction, including $2.5 billion in preferred stock and exercising an option for $500 million in common equity from the Haas Family Trusts.
These actions, once completed, and taken together with Dow's offer to issue $550 million in equity to the Rohm and Haas ESOP, will effectively reduce Dow's originally anticipated bridge loan debt from $13.0 billion to approximately $7.5 billion. The company has almost replaced the $7.5 billion cash shortfall created by the failure of the K-Dow transaction to close.

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