1 min read.Updated: 28 Jun 2016, 06:20 PM ISTTom Lavell
Dow Chemical plans to take a charge of $410 million to $460 million in Q2 for asset impairments, employee severance and other costs related to the revamp
Frankfurt: Dow Chemical Co. plans to eliminate about 2,500 jobs and shut plants in North Carolina and Japan to achieve $500 million in cost savings and more revenue from taking full control of its Dow Corning Corp. silicone venture.
The company will take a charge of about $410 million to $460 million in the second quarter for asset impairments, employee severance and other costs related to the revamp, Dow said Tuesday in a statement.
Dow paid $4.8 billion to buy partner Corning Inc.’s 50% stake in the 72-year-old joint venture in a deal completed at the beginning of June. The takeover is part of Dow Chemical chief executive officer Andrew Liveris’s effort to focus on higher-value products. The company is also seeking to merge with DuPont Co., a combination that’s now under antitrust scrutiny.
“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," Liveris said in the statement.
Dow will shut silicone factories in Greensboro, North Carolina, and Yamakita, Japan, as well as some offices and production lines in other unspecified locations, according to the statement. Annual cost savings from taking over Dow Corning will total $400 million, a 33% increase from a previous estimate, and the deal will bring in $100 million in additional growth, the company said. Earnings before interest, taxes, depreciation and amortization will be boosted by $1 billion, it said. These goals were previously stated except for the lifting of the cost savings target by $100 million. Bloomberg
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