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Dow Announces Further Goals in Its Portfolio Transformation

MIDLAND, Mich.--(BUSINESS WIRE)--With the completion of a series of strategic portfolio management actions throughout 2014 and through 3Q 2015, and with aggressive milestones that were first announced in late 2013 being surpassed, The Dow Chemical Company (NYSE: DOW) today announces an update on its intermediate-term goals.

“Today’s announcements further illustrate the strength of Dow’s financial position, and our unwavering commitment to consistently and increasingly reward shareholders”

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The Company will continue its intense focus on delivering earnings growth and increasing shareholder returns, which have yielded 12 quarters in a row of year-over-year earnings growth, margin expansion and record levels of cash returned to shareholders. As a result, Dow announces several high-priority goals to further position the Company to maximize long-term shareholder value.

First, Dow’s drive to provide strategic clarity on its joint venture portfolio will continue as follows:

  • Firstly, the Kuwait joint ventures will be restructured over the next nine months, resulting in a different ownership structure and enabling strategic growth for these companies. These transactions have been documented via a non-binding Heads of Agreements, subject to finalization of definitive agreements. As a consequence Dow will reduce its overall equity in the MEGlobal joint venture, receiving $1.5 billion in pre-tax proceeds, with this deal closing by year-end 2015. In the second phase, Dow will further reduce its overall ownership interest in Greater EQUATE. The pre-agreed with PIC target date to complete this second phase of the transaction is mid-2016.
  • Secondly, Dow reaffirms prior comments made by Dow and Corning related to the future of Dow Corning. Dow will have more to say on this subject on its earnings call.

Second, Dow’s large investments on the U.S. Gulf Coast and in Saudi Arabia will begin starting up this quarter, and will ramp to full production over the next two years. As these large investments and capital programs are completed, Dow’s capital expenditures will be managed down to depreciation levels.

Third, Dow today confirms its ongoing portfolio actions will be centered on Dow AgroSciences. The Company will review all options with a best-owner mindset, with a focus on creating new synergies in a consolidating agricultural market. The Company is considering only those prospects that will extract further value from this highly attractive and well-positioned business and return significant value to its shareholders, and will compare those options to...