The Dow Chemical Company (“TDCC”), a wholly owned subsidiary of
Dow Inc. (“Dow”) (NYSE: DOW) announced today that it has commenced
cash tender offers (each, individually with respect to a series of
Notes, a “Tender Offer” with respect to such series, and
collectively, the “Tender Offers”) to purchase its debt securities
and certain debt securities of Union Carbide Corporation (“Union
Carbide”), a wholly-owned subsidiary of TDCC, listed in the table
below (collectively, the “Notes”) in an aggregate purchase price
(excluding Accrued Interest (as defined below)) of up to $550
million (the “Maximum Tender Offer Amount”) upon the terms and
subject to the conditions set forth in the Offer to Purchase dated
August 17, 2020 (the “Offer to Purchase”). “Aggregate purchase
price” refers to the aggregate price to be paid by us in
repurchasing any of the series of Notes eligible for the Tender
Offers, excluding Accrued Interest, which will not be included in
the Maximum Tender Offer Amount.
Each Tender Offer is open to all registered holders of such
series of Notes (individually, a “Holder” and collectively, the
“Holders”). Subject to the Maximum Tender Offer Amount and the
“Tender Caps” (as set forth in the table below), the amount of a
series of Notes that is purchased in the Tender Offers on the
applicable Settlement Date (as defined below) will be based on the
acceptance priority level for such series (in numerical priority
order, with 1 being the highest) (the “Acceptance Priority Level”)
set forth in the table below and on the cover page of the Offer to
Purchase, subject to the proration arrangements applicable to the
Tender Offers.
Title of Notes
CUSIP Number
Original Issuer
Total Principal Amount
Outstanding (SecReg & 144A)
Acceptance Priority
Level
Tender Cap (Aggregate
Principal Amount)
Reference U.S. Treasury
Security
Bloomberg Reference
Page(1)
Fixed Spread
Early Tender
Premium(2)
7.375% Senior Notes due 2023
260543BE2
TDCC
$150,000,000
1
$75,000,000
0.125% due August 15, 2023
FIT1
75 bps
$30
7.875% Senior Notes due 2023
905572AD5
Union Carbide
$175,000,000
2
$85,000,000
0.125% due August 15, 2023
FIT1
75 bps
$30
7.500% Senior Notes due 2025
905581AR5
Union Carbide
$150,000,000
3
$50,000,000
0.250% due July 31, 2025
FIT1
100 bps
$30
3.150% Senior Notes due 2024
260543CT8
260543CS0 (144A)
U26054KJ1 (Reg S)
TDCC
$500,000,000
4
None
0.250% due July 31, 2025
FIT1
50 bps
$30
3.500% Senior Notes due 2024
260543CJ0
TDCC
$900,000,000
5
None
0.250% due July 31, 2025
FIT1
50 bps
$30
3.625% Senior Notes due 2026
260543CX9
260543CW1 (144A)
U26054KL6 (Reg S)
TDCC
$750,000,000
6
$75,000,000
0.250% due July 31, 2025
FIT1
90 bps
$30
(1)
The applicable page on Bloomberg from
which the Lead Dealer Manager (as defined below) will quote the
bid-side prices of the applicable Reference U.S. Treasury Security
(as defined below).
(2)
Per $1,000 principal amount of the
applicable series of Notes tendered at or prior to the Early Tender
Deadline (as defined below) and accepted for purchase.
The Tender Offers are being made upon, and are subject to, the
terms and conditions set forth in the Offer to Purchase. The Tender
Offers will expire at 11:59 p.m., New York City time, on September
14, 2020, unless extended by TDCC or earlier terminated with
respect to any Tender Offer (such date and time, as it may be
extended or earlier terminated, the “Expiration Time”). No tenders
of Notes submitted after the Expiration Time will be valid. Holders
of Notes that are validly tendered and not validly withdrawn at or
prior to 5:00 p.m., New York City time, on August 28, 2020 (such
date and time, as it may be extended, the “Early Tender Deadline”)
that are accepted for purchase will receive the applicable Total
Consideration (as defined below), which includes an early tender
premium of $30 per $1,000 principal amount of the Notes accepted
for purchase (the “Early Tender Premium”). Holders of Notes that
are validly tendered and not validly withdrawn following the Early
Tender Deadline but at or prior to the Expiration Time that are
accepted for purchase (if any) will receive only the applicable
“Tender Offer Consideration,” which is, for each series of Notes,
the applicable Total Consideration minus the applicable Early
Tender Premium.
The “Total Consideration” for each series per $1,000 principal
amount of Notes validly tendered and accepted for purchase by TDCC
pursuant to the Tender Offers will be determined in the manner
described in the Offer to Purchase by reference to the applicable
fixed spread specified for such series of Notes in the table above
over the yield based on the bid side price of the applicable U.S.
Treasury Security (the “Reference U.S. Treasury Security”)
specified for each series of Notes in the table above, as
calculated by the Lead Dealer Manager (as defined below) at 10:00
a.m., New York City time, on August 31, 2020, in accordance with
standard market practice, subject to certain exceptions set forth
in the Offer to Purchase.
In addition to the Total Consideration or Tender Offer
Consideration, as applicable, Holders of Notes accepted for
purchase will receive accrued and unpaid interest, rounded to the
nearest cent on the applicable series of Notes from the last
interest payment date with respect to such Notes to, but not
including, the applicable Settlement Date, less any applicable
withholding taxes (“Accrued Interest”). The Accrued Interest
payable pursuant to the Tender Offers is excluded from the Maximum
Tender Offer Amount.
Tendered Notes may be validly withdrawn from the Tender Offers
at or prior to 5:00 p.m., New York City time, on August 28, 2020,
unless extended by TDCC with respect to any Tender Offer (such date
and time, as it may be extended, the “Withdrawal Deadline”). After
the applicable Withdrawal Deadline, Holders who have validly
tendered their Notes may not validly withdraw such Notes unless
TDCC is required to extend withdrawal rights under applicable
law.
TDCC reserves the right, but is under no obligation, at any
point following the Early Tender Deadline and before the Expiration
Time, subject to the satisfaction or waiver of the conditions to
the Tender Offers (including the Financing Condition (as defined
below)), to accept for purchase any Notes validly tendered and not
validly withdrawn at or prior to the Early Tender Deadline (the
settlement date of such purchase being the “Early Settlement
Date”), subject to the Maximum Tender Offer Amount, the Tender
Caps, the Acceptance Priority Levels and the proration arrangements
applicable to the Tender Offers. The Early Settlement Date will be
determined at TDCC’s option and is currently expected to occur on
or after September 1, 2020, subject to all conditions to the Tender
Offers (including the Financing Condition) having been either
satisfied or waived by TDCC. Irrespective of whether TDCC chooses
to exercise its option to have an Early Settlement Date, TDCC will
purchase any remaining Notes that have been validly tendered at or
prior to the Expiration Time and that TDCC chooses to accept for
purchase, subject to all conditions to the Tender Offers (including
the Financing Condition) having been either satisfied or waived by
TDCC, promptly following the Expiration Time (the settlement date
of such purchase being the “Final Settlement Date”; the Final
Settlement Date and the Early Settlement Date each being a
“Settlement Date”), subject to the Maximum Tender Offer Amount, the
Tender Caps, the Acceptance Priority Levels and proration
arrangements applicable to the Tender Offers. The Final Settlement
Date is expected to occur on September 16, 2020, the second
business day following the Expiration Time, assuming that the
conditions to the Tender Offers (including the Financing Condition)
are satisfied or waived and Notes in an aggregate purchase price
equal to the Maximum Tender Offer Amount are not purchased on the
Early Settlement Date.
Subject to the Maximum Tender Offer Amount, the Tender Caps and
the proration arrangements applicable to the Tender Offers, all
Notes validly tendered at or prior to the Early Tender Deadline
having a higher Acceptance Priority Level will be accepted before
any Notes validly tendered at or prior to the Early Tender Deadline
having a lower Acceptance Priority Level are accepted. Among any
Notes validly tendered following the Early Tender Deadline but at
or prior to the Expiration Time, Notes having a higher Acceptance
Priority Level will be accepted before any Notes having a lower
Acceptance Priority Level are accepted. However, if the Tender
Offers are not fully subscribed as of the Early Tender Deadline,
subject to the Tender Caps, Notes validly tendered at or prior to
the Early Tender Deadline will be accepted for purchase in priority
to other Notes tendered following the Early Tender Deadline, even
if such Notes tendered following the Early Tender Deadline have a
higher Acceptance Priority Level than Notes tendered at or prior to
the Early Tender Deadline.
Acceptances for tenders of Notes of a series may be subject to
proration if the aggregate purchase price of the Notes of such
series validly tendered would cause the applicable Tender Cap or
the Maximum Tender Offer Amount to be exceeded. Furthermore, absent
an amendment of the Tender Offers, (i) if the Tender Offers are
fully subscribed as of the Early Tender Deadline, Holders who
validly tender Notes following the Early Tender Deadline will not
have any of their Notes accepted for purchase, and (ii) if any
Tender Cap is reached as of the Early Tender Deadline, Holders who
validly tender Notes subject to such Tender Cap following the Early
Tender Deadline will not have any of their Notes of such series
accepted for purchase.
TDCC’s obligation to accept for payment and to pay for any of
the Notes validly tendered in the Tender Offers is not subject to
any minimum purchase price of Notes in the aggregate or of any
series being tendered, but is subject to the satisfaction or waiver
of a number of conditions described in the Offer to Purchase,
including a financing condition in respect of issuing senior debt
securities on satisfactory terms and conditions (the “Financing
Condition”). TDCC reserves the right, subject to applicable law,
to: (i) waive any and all conditions to any Tender Offer; (ii)
extend or terminate any Tender Offer; (iii) increase or decrease
the Maximum Tender Offer Amount and/or increase, decrease or
eliminate any of the Tender Caps; or (iv) otherwise amend any
Tender Offer in any respect.
A Holder wishing to tender Notes may do so by book-entry
transfer and delivery of an agent’s message pursuant to DTC’s
Automated Tender Offer Program. TDCC has retained BofA Securities
to act as lead dealer manager in connection with the Tender Offers
(the “Lead Dealer Manager”) and BNP Paribas Securities Corp. and
HSBC Securities (USA) Inc. to act as Co-Dealer Managers (the
“Co-Dealer Managers” and, together with the Lead Dealer Manager,
the “Dealer Managers”). Questions and requests for assistance
regarding the terms of the Tender Offers should be directed to BofA
Securities at (980) 387-3907 (collect) or debt_advisory@bofa.com
(email); BNP Paribas Securities Corp. at (888) 210-4358
(toll-free); and HSBC Securities (USA) Inc. at (866) 811-8049
(toll-free). Copies of the Offer to Purchase and any amendments or
supplements to the foregoing may be obtained from Global Bondholder
Services Corporation, the depositary and information agent for the
Tender Offers (the “Depositary and Information Agent”), by calling
(212) 430-3774 (for banks and brokers only) or (866) 470-4300
(toll-free) (for all others) or via contact@gbsc-usa.com.
None of TDCC, Union Carbide, the Depositary and Information
Agent, the Dealer Managers or the trustee under the indenture
governing the Notes, or any of their respective affiliates, is
making any recommendation as to whether Holders should tender or
refrain from tendering all or any portion of their Notes in
response to the Tender Offers, and no one has been authorized by
any of them to make such a recommendation. Holders must make their
own decision as to whether to tender their Notes and, if so, the
principal amount of Notes as to which action is to be taken.
Holders should consult their tax, accounting, financial and legal
advisers regarding the tax, accounting, financial and legal
consequences of participating or declining to participate in the
Tender Offers.
The Tender Offers are only being made pursuant to the Offer to
Purchase. This press release is neither an offer to purchase or
sell nor a solicitation of an offer to purchase or sell any Notes
in the Tender Offers or any other securities of TDCC and Union
Carbide. The Tender Offers are not being made to Holders of Notes
in any jurisdiction in which the making or acceptance thereof would
not be in compliance with the securities, blue sky or other laws of
such jurisdiction. In any jurisdiction in which the Tender Offers
are required to be made by a licensed broker or dealer, the Tender
Offers will be deemed to be made on behalf of TDCC or Union Carbide
by the Dealer Managers, or one or more registered brokers or
dealers that are licensed under the laws of such jurisdiction.
About Dow
Dow (NYSE: DOW) combines global breadth, asset integration and
scale, focused innovation and leading business positions to achieve
profitable growth. The Company’s ambition is to become the most
innovative, customer centric, inclusive and sustainable materials
science company. Dow’s portfolio of plastics, industrial
intermediates, coatings and silicones businesses delivers a broad
range of differentiated science-based products and solutions for
its customers in high-growth market segments, such as packaging,
infrastructure and consumer care. Dow operates 109 manufacturing
sites in 31 countries and employs approximately 36,500 people. Dow
delivered sales of approximately $43 billion in 2019. References to
Dow or the Company mean Dow Inc. and its subsidiaries. For more
information, please visit www.dow.com or follow @DowNewsroom on
Twitter.
Union Carbide Corporation is a chemicals and polymers company
that has been a wholly-owned subsidiary of The Dow Chemical Company
since 2001.
Cautionary Statement about Forward-Looking Statements
This press release contains “forward-looking statements” within
the meaning of the federal securities laws, including Section 27A
of the Securities Act of 1933, as amended, and Section 21E of the
Securities Exchange Act of 1934, as amended. In this context,
forward-looking statements often address expected future business
and financial performance, financial condition, and other matters,
and often contain words such as “anticipate,” “believe,”
“estimate,” “expect,” “intend,” “may,” “opportunity,” “outlook,”
“plan,” “project,” “seek,” “should,” “strategy,” “target,” “will,”
“will be,” “will continue,” “will likely result,” “would” and
similar expressions, and variations or negatives of these words.
Forward-looking statements are based on current expectations and
assumptions that are subject to risks and uncertainties which may
cause actual results to differ materially from the forward-looking
statements.
Forward-looking statements include, but are not limited to:
expectations as to future sales of Dow’s products; the ability to
protect Dow’s intellectual property in the United States and
abroad; estimates regarding Dow’s capital requirements and need for
and availability of financing; estimates of Dow’s expenses, future
revenues and profitability; estimates of the size of the markets
for Dow’s products and services and Dow’s ability to compete in
such markets; expectations related to the rate and degree of market
acceptance of Dow’s products; the outcome of certain Dow
contingencies, such as litigation and environmental matters;
estimates of the success of competing technologies that may become
available; the continuing global and regional economic impacts of
the coronavirus disease 2019 (“COVID-19”) pandemic and crude oil
supply and price volatility; estimates regarding benefits achieved
through contemplated restructuring activities, such as workforce
reduction, exit and disposal activities; and expectations regarding
the benefits and costs associated with each of the foregoing.
Forward-looking statements by their nature address matters that
are, to different degrees, uncertain. Forward-looking statements
are based on certain assumptions and expectations of future events
which may not be realized and speak only as of the date the
statements were made. In addition, forward-looking statements also
involve risks, uncertainties and other factors that are beyond
Dow’s control that could cause Dow’s actual results to differ
materially from those projected, anticipated or implied in the
forward-looking statements. These factors include, but are not
limited to: fluctuations in energy and raw material prices; failure
to develop and market new products and optimally manage product
life cycles; significant litigation and environmental matters;
failure to appropriately manage process safety and product
stewardship issues; changes in laws and regulations or political
conditions; global economic and capital markets conditions, such as
inflation, market uncertainty, interest and currency exchange
rates, and equity and commodity prices; business or supply
disruptions; security threats, such as acts of sabotage, terrorism
or war; weather events and natural disasters; ability to protect,
defend and enforce Dow’s intellectual property rights; increased
competition; changes in relationships with Dow’s significant
customers and suppliers; unanticipated expenses such as litigation
or legal settlement expenses; unanticipated business disruptions;
Dow’s ability to predict, identify and interpret changes in
consumer preferences and demand; Dow’s ability to complete proposed
divestitures or acquisitions; Dow’s ability to realize the expected
benefits of acquisitions if they are completed; the availability of
financing to Dow in the future and the terms and conditions of such
financing; disruptions in Dow’s information technology networks and
systems; the continuing risks related to the COVID-19 pandemic and
crude oil supply and price volatility; and Dow’s ability to realize
the expected benefits of restructuring activities if they are
approved and completed. Additionally, there may be other risks and
uncertainties that Dow is unable to identify at this time or that
Dow does not currently expect to have a material impact on its
business.
Risks related to achieving the anticipated benefits of Dow’s
separation from DowDuPont include, but are not limited to, a number
of conditions outside the control of Dow, including risks related
to: (i) Dow’s inability to achieve some or all of the benefits that
it expects to receive from the separation from DowDuPont; (ii)
certain tax risks associated with the separation; (iii) the failure
of Dow’s pro forma financial information to be a reliable indicator
of Dow’s future results; (iv) Dow’s inability to receive
third-party consents required under the separation agreement; (v)
non-compete restrictions under the separation agreement; (vi)
receipt of less favorable terms in the commercial agreements Dow
entered into with DuPont and Corteva, Inc. (“Corteva”), including
restrictions under intellectual property cross-license agreements,
than Dow would have received from an unaffiliated third party; and
(vii) Dow’s obligation to indemnify DuPont and/or Corteva for
certain liabilities.
Where, in any forward-looking statement, an expectation or
belief as to future results or events is expressed, such
expectation or belief is based on the current plans and
expectations of management and expressed in good faith and believed
to have a reasonable basis, but there can be no assurance that the
expectation or belief will result or be achieved or accomplished.
For a more detailed discussion of Dow’s risks and uncertainties,
see the section titled “Risk Factors” contained in Part II, Item 1A
of the combined Dow Inc. and TDCC Quarterly Reports on Form 10-Q
for the quarterly periods ended March 31, 2020 and June 30, 2020
and Part I, Item 1A of the combined Dow Inc. and TDCC Annual Report
on Form 10-K for the fiscal year ended December 31, 2019. Dow Inc.
and TDCC assume no obligation to update or revise publicly any
forward-looking statements whether because of new information,
future events or otherwise, except as required by securities and
other applicable laws.
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INVESTORS: Colleen Kay ckay@dow.com +1 989-636-0920
MEDIA: Kyle Bandlow kbandlow@dow.com +1 989-638-2417
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