02.11.2017 12:11:09
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Dow Chemical To Record $900 Mln Pretax Restructuring Charges In Q4
(RTTNews) - Dow Chemical Co., a subsidiary of DowDuPont Inc.(DWDP), on Thursday said it has approved restructuring actions in connection with the DowDuPont Cost Synergy Program. The company expects to record total pretax restructuring charges of about $1.3 billion, based on all actions approved to date under the Synergy Program.
Of the total charges, approximately $900 million will be recorded in the fourth quarter of 2017, with the remaining restructuring charges to be incurred by the end of 2019.
In an SEC filing, Dow said the Synergy Program is designed to integrate and optimize the organization following the all-stock merger of equals strategic combination between Dow and DuPont.
The program is in preparation for the separation of the combined company's agriculture business, materials science business and specialty products business through one or more tax-efficient transactions. The Intended Business Separations are subject to approval by the DowDuPont Board.
Dow Chemical previously approved post-merger restructuring actions in connection with the Synergy Program with related charges of up to $140 million for which pretax charges of $139 million were recorded in the third quarter of 2017.
The Company said the expected $1.3 billion charge is comprised of approximately $525 million to $575 million of severance and related benefits costs, $400 million to $440 million of asset related charges, and $290 million to $310 million of costs related to contract terminations.
According to the firm, future cash payments related to this charge are anticipated to be approximately $815 million to $885 million, primarily related to the payment of severance and related benefits and contract termination costs.
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