Corning to Swap Stake In Dow Corning For $4.8 Billion, Semiconductor Stake--Update
11 Dezember 2015 - 7:13PM
Dow Jones News
By Chelsey Dulaney
Corning Inc. said Friday that it will swap its stake in Dow
Corning for $4.8 billion and an interest in a semiconductor
company, ending a 72-year joint venture with Dow Chemical Co. that
has faced challenges in recent decades.
The announcement came the same day as Dow agreed to merge with
DuPont Co., creating a chemical giant with a market value of about
$130 billion.
Ahead of that merger, expected to close in the second half of
next year, Dow will take full ownership over Dow Corning, which
makes silicone products. For Dow, the move is expected to yield
more than $1 billion in annual earnings before interest, taxes,
depreciation and amortization.
Corning, meanwhile, will receive $4.8 billion in cash in
exchange for its 50% stake in Dow Corning. Corning will also
receive a 40% stake in Hemlock Semiconductor Group, which makes
semiconductors for the solar-panel industry and is currently
majority owned by Dow Corning. Corning expects the moves to be
"substantially tax-free."
Corning shares added 3.7% to $18.35 a share in late morning
trading, while Dow's shares slipped 3.1% to $53.20 a share.
Corning Chief Executive Wendell P. Weeks said Dow Corning's
silicones business no longer fits into Corning's core technologies
and manufacturing platforms.
Dow and Corning formed the joint venture in 1943. Over the
years, Dow Corning has hit a number of roadblocks.
Dow Corning was forced into bankruptcy in 1995, after it was
besieged with lawsuits over its silicone devices. Many women with
breast implants filed suits claiming that the silicone caused
illnesses ranging from tissue damage to problems with their immune
systems. The company emerged from bankruptcy in 2004.
More recently, Dow Corning has been hit by a strong U.S. dollar
and oversupply in the silicone and polysilicon industry.
Write to Chelsey Dulaney at Chelsey.Dulaney@wsj.com
(END) Dow Jones Newswires
December 11, 2015 12:58 ET (17:58 GMT)
Copyright (c) 2015 Dow Jones & Company, Inc.
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