Dow Chemical (DOW) Agrees to Divest Morton Salt

April 2, 2009 8:00 AM EDT

The Dow Chemical Company (NYSE: DOW) today announced that Rohm and Haas, a wholly owned subsidiary of The Dow Chemical Company, has entered into a definitive agreement to sell the stock of Morton International, Inc., the salt business of Rohm and Haas, to K+S Aktiengesellschaft.

The sale of Morton International is the next step in Dow's de-leveraging plan. The actions taken by the Company since early January include:

• Re-negotiated and extended the terms of the Rohm and Haas bridge loan.
  
• Reduced the dividend by 64%, saving approximately $1.0 billion on an annualized basis.
  
• Negotiated for more favorable terms in connection with the Rohm and Haas transaction, including $2.5 billion in preferred stock and exercising an option for $500 million in common equity from the Haas Family Trusts.

These actions, once completed, and taken together with Dow's offer to issue $550 million in equity to the Rohm and Haas ESOP, will effectively reduce Dow's originally anticipated bridge loan debt from $13.0 billion to approximately $7.5 billion. The Company has almost replaced the $7.5 billion cash shortfall created by the failure of the K-Dow transaction to close.

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