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Realignment delivers $4.8 billion in cash and continues
Corning's interest in
Hemlock Semiconductor
Group
CORNING, N.Y. - Corning
Incorporated (NYSE: GLW) today announced that it will exchange its
50% interest in Dow Corning Corporation for 100% of the stock of a
newly formed entity that will become a wholly owned subsidiary of
Corning Incorporated. The newly formed entity will hold
approximately 40% ownership in Hemlock Semiconductor Group and
approximately $4.8 billion in cash. Corning expects the realignment
to be substantially tax-free.
Upon completion of the exchange, The Dow Chemical
Company, an equal owner of Dow Corning with Corning since 1943,
will assume 100% ownership of Dow Corning.
Wendell P. Weeks, chairman, chief executive
officer and president, said, "We believe this strategic realignment
will create significant value for our shareholders by further
focusing our portfolio and increasing our financial strength.
"We are proud of Dow Corning's success, and
pleased that our 72-year partnership will continue through our
ownership in Hemlock Semiconductor. Today, however, Dow Corning's
silicones business lies outside the technologies and manufacturing
platforms core to our strategic framework."
Hemlock Semiconductor, a leading provider of
polycrystalline silicon used in the manufacturing of semiconductor
and solar devices is currently 80.5% owned by Dow Corning. In 2015,
Hemlock is expected to generate approximately $1 billion in sales
and $160 million in earnings and contribute approximately $65
million in gross equity earnings to Corning. Upon completion of the
strategic realignment, Hemlock will be 40.25% owned by Corning
through the newly formed entity; 40.25% owned by Dow Corning
Corporation; and 19.5% owned by Shin-Etsu Handotai Co. Ltd. Hemlock
has approximately 1,000 employees.
R. Tony Tripeny, senior vice president and chief
financial officer, said, "This exchange unlocks the value of Dow
Corning. While we will no longer receive equity earnings or
dividends from Dow Corning's silicones business, we are confident
that Hemlock and deployment of the new entity's $4.8 billion will
create significant value for our shareholders, including EPS
accretion."
The strategic realignment, approved by the boards
of Corning and Dow Chemical, is expected to close during the first
half of 2016. It is subject to customary closing conditions
including regulatory approvals.
J.P. Morgan Securities LLC served as financial
adviser to Corning on the transaction. Kirkland & Ellis LLP and
KPMG LLP provided legal and tax advice to the company, including
opinions that the realignment is substantially tax free.
Conference Call
Information
Dow and Corning will host a joint conference call and webcast today
at 7:30 a.m. Eastern Time (U.S.) to discuss the transaction.
Participants will include Dow's chairman and CEO and Corning's
chairman and CEO. To access the audio webcast, the dial-in number
is (719) 457-2080. Please call five to ten minutes prior to the
scheduled start of the teleconference. No password is
required. The webcast can be accessed at www.dow.com. For those
unable to listen to the live broadcast, a replay will be available
on both websites. A copy of the investor presentation will be made
available on both companies' Investor Relations websites.
Presentation of Information in
this News Release
Non-GAAP financial measures are not in accordance with, or an
alternative to, GAAP. Corning's non-GAAP financial measures exclude
the impact of items that are driven by general economic conditions
and events that do not reflect the underlying fundamentals and
trends in the company's operations. The company believes
presenting non-GAAP financial measures assists in analyzing
financial performance without the impact of items that may obscure
trends in the company's underlying performance. Detailed
reconciliations outlining the differences between these non-GAAP
measures and the most directly comparable GAAP measure can be found
on the company's website by going to
www.corning.com/investor_relations and clicking "Financial Reports"
on the left. These reconciliations also accompany this news
release.
Forward-Looking and Cautionary
Statements
This press release contains "forward-looking statements" (within
the meaning of the Private Securities Litigation Reform Act of
1995), which are based on current expectations and assumptions
about Corning's financial results and business operations, that
involve substantial risks and uncertainties that could cause actual
results to differ materially. These risks and uncertainties
include: the effect of global political, economic and business
conditions; conditions in the financial and credit
markets; currency fluctuations; tax rates; product demand
and industry capacity; competition; reliance on a concentrated
customer base; manufacturing efficiencies; cost reductions;
availability of critical components and materials; new product
commercialization; pricing fluctuations and changes in
the mix of sales between premium and non-premium products; new
plant start-up or restructuring costs; possible
disruption in commercial activities due to terrorist activity,
armed conflict, political or financial instability, natural
disasters, adverse weather conditions, or major health concerns;
adequacy of insurance; equity company activities; acquisition and
divestiture activities; the level of excess or obsolete inventory;
the rate of technology change; the ability to enforce patents;
product and components performance issues; retention of key
personnel; stock price fluctuations; and adverse litigation or
regulatory developments. These and other risk factors
are detailed in Corning's filings with the Securities and
Exchange Commission. Forward-looking statements speak only as
of the day that they are made, and Corning undertakes no obligation
to update them in light of new information or future events.
Digital Media
Disclosure
In accordance with guidance provided by the SEC regarding the use
of company websites and social media channels to disclose material
information, Corning Incorporated ("Corning") wishes to notify
investors, media, and other interested parties that it intends to
use its website
(http://www.corning.com/worldwide/en/about-us/news-events.html) to
publish important information about the company, including
information that may be deemed material to investors. The list of
websites and social media channels that the company uses may be
updated on Corning's media and website from time to time. Corning
encourages investors, media, and other interested parties to review
the information Corning may publish through its website and social
media channels as described above, in addition to the company's SEC
filings, press releases, conference calls, and webcasts.
About Corning
Incorporated
Corning (www.corning.com) is one of the world's leading innovators
in materials science. For more than 160 years, Corning has applied
its unparalleled expertise in specialty glass, ceramics, and
optical physics to develop products that have created new
industries and transformed people's lives. Corning succeeds through
sustained investment in R&D, a unique combination of material
and process innovation, and close collaboration with customers to
solve tough technology challenges. Corning's businesses and markets
are constantly evolving. Today, Corning's products enable diverse
industries such as consumer electronics, telecommunications,
transportation, and life sciences. They include damage-resistant
cover glass for smartphones and tablets; precision glass for
advanced displays; optical fiber, wireless technologies, and
connectivity solutions for high-speed communications networks;
trusted products that accelerate drug discovery and manufacturing;
and emissions-control products for cars, trucks, and off-road
vehicles.
About Hemlock Semiconductor
Group
Hemlock Semiconductor Group (Hemlock Semiconductor) is comprised of
several joint venture companies owned in majority by Dow Corning
Corporation. Hemlock Semiconductor is a leading provider of
polycrystalline silicon and other silicon-based products used in
the manufacturing of semiconductor devices, and solar cells and
modules. Hemlock Semiconductor began its operations in 1961.
Media Relations
Contact:
Daniel F.
Collins
(607)
974-4197
collinsdf@corning.com
Investor Relations
Contact:
Ann H.S. Nicholson
(607) 974-6716
nicholsoas@corning.com
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This
announcement is distributed by NASDAQ OMX Corporate Solutions on
behalf of NASDAQ OMX Corporate Solutions clients.
The issuer of this announcement warrants that they are solely
responsible for the content, accuracy and originality of the
information contained therein.
Source: Corning Incorporated via Globenewswire
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