Dow Chemical Cutting 2,500 Jobs

(RTTNews) - Dow Chemical Co. (DOW) Tuesday announced its plans to eliminate about 2,500 jobs, or about 4 percent of global workforce, as the company takes full control of Dow Corning Corp., the joint venture formed in 1943 with Corning Inc.

Dow Chemicals now owns Dow Corning Corp. completely after Corning exchanged shares of the silicone company for cash and an interest in a semiconductor company with Dow Chemicals.

Dow Chemicals will shut silicone plants in North Carolina and Japan as well as certain administrative, corporate and manufacturing facilities to further enhance competitiveness and streamline costs associated with the transaction.

Dow Corning produces silicon-based products for aerospace, automotive and electrical industries.

Dow Chemical now expects annual cost savings from the deal to be $400 million, up from prior estimate of $300 million. The company said it was also targeting $100 million in growth synergies. Dow expects to achieve its cost synergy target run rate of 70 percent within 12 months of closing the Dow Corning transaction, and 100 percent within 24 months.

The deal will also be accretive to Dow Chemical's operating earnings per share, cash flow from operations and free cash flow in the first full year after close.

Dow Chemical will take a charge of about $410 million to $460 million in the second quarter for asset impairments, severance and other costs.