Dow to cut jobs as part of Corning deal
(Reuters) Dow Chemical Co. said it would lay off about 2,500 employees globally, or about 4% of its workforce, as part of a deal to assume full control of Dow Corning, which was a joint venture with Gorilla glass maker Corning Inc.
The seeds and chemical maker said it would also shut down silicones manufacturing facilities in Greensboro, North Carolina, and Yamakita, Japan, as well as certain administrative, corporate and manufacturing facilities.
Formed in 1943, Dow Corning produces silicon-based products for aerospace, automotive and electrical industries.
Dow Chemical announced the deal for Dow Corning in December, when it also said it would merge with DuPont in an all-stock deal, which then valued the combined company at $130 B.
Dow Chemical on Tuesday raised its annual cost savings estimate for the deal to $400 M from $300 M. The company said it was also targeting $100 M in growth synergies.
Dow Chemical said the actions announced on Tuesday would position the company to achieve its cost synergy target run rate of 70 % within 12 months of closing the deal, and 100 % within 24 months.
The deal is expected to add 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 said it would take a charge of about $410 M to $460 M in the second quarter for asset impairments, severance and other costs.
Reporting by Swetha Gopinath in Bengaluru; Editing by Shounak Dasgupta and Maju Samuel
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