GLW Corning Inc

By Chelsey Dulaney 

Corning Inc. said Friday that it would sell its stake in Dow Corning for $4.8 billion, ending a 72-year joint venture with Dow Chemical Co. that has faced challenges in recent decades.

The sale announcement came the same day as Dow agreed to merge with DuPont Co., creating a chemical giant with a market value of about $130 billion.

Ahead of that merger, which is expected to close in the second half of next year, Dow will take full ownership of Dow Corning, which makes silicone products. For Dow, the move is expected to yield more than $1 billion in annual earnings before interest, taxes, depreciation and amortization.

Corning, meanwhile, will receive $4.8 billion in cash as well as a 40% stake in Hemlock Semiconductor Group, which makes semiconductors for the solar-panel industry and is currently majority owned by Dow Corning. Corning expects the moves to be "substantially tax-free."

Corning shares rose 4.3% to $18.45 in morning trading in New York, while Dow's shares slipped 3.9% to $52.79.

Corning Chief Executive Wendell P. Weeks said Dow Corning's silicones business no longer fits into Corning's core technologies and manufacturing platforms.

Dow and Corning formed the joint venture in 1943. Over the years, Dow Corning has hit a number of roadblocks.

Dow Corning was forced into bankruptcy in 1995, after it was besieged with lawsuits over its silicone devices. Many women with breast implants filed suits claiming that the silicone caused illnesses ranging from tissue damage to problems with their immune systems. The company emerged from bankruptcy in 2004.

More recently, Dow Corning has been hit by a strong U.S. dollar and oversupply in the silicone and polysilicon industry.

Write to Chelsey Dulaney at Chelsey.Dulaney@wsj.com

(END) Dow Jones Newswires

December 11, 2015 12:35 ET (17:35 GMT)

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