Dow Announces Results of Its Debt Tender Offers

Company Retires $2.5 Billion of Debt in the First Quarter

MIDLAND, Mich.--(BUSINESS WIRE)--The Dow Chemical Company (NYSE: DOW) announced today the final results for its previously announced modified “Dutch Auction” cash tender offers for $1.5 billion aggregate principal amount of certain notes issued by Dow and its subsidiaries, Union Carbide Corporation and Rohm and Haas Company.

This announcement represents the final component of a series of debt reduction activities Dow has executed in the first quarter, including the pay-off of $950 million of maturing and other debt. Taken together, these actions enabled Dow to reduce its gross debt by $2.5 billion, and will reduce the Company’s interest expense by nearly $200 million on an annual basis.

“This is a strong example of Dow’s focus on executing against our stated priorities for 2011 – namely, deleveraging and further enhancing our financial flexibility,” said Bill Weideman, Dow’s executive vice president and chief financial officer. “Our actions this quarter will deliver a structural reduction in interest expense, which is accretive to our common shareholders going forward while still maintaining a cash balance above historical levels, illustrating our strengthened capital structure.”

Details of the Final Results:

The tender offers for certain notes issued by Dow and its subsidiaries, Union Carbide Corporation and Rohm and Haas Company, expired at 12:00 midnight, New York City time, on March 22, 2011. As of the expiration date, Dow received tenders for $1.71 billion aggregate principal amount of the Pool 1 notes and $832.11 million aggregate principal amount of the Pool 2 notes, each listed in the table below. Based on the modified tender caps and the proration terms of the tender offers, Dow accepted $1.2 billion and $300 million aggregate principal amount of the Pool 1 notes and the Pool 2 notes, respectively, resulting in aggregate consideration of $1.94 billion (plus an additional $44.93 million in aggregate accrued interest). The notes that have been accepted in the tender offers will be purchased, retired and cancelled by the relevant issuer.

Based on the terms of the tender offers, Dow determined the clearing spreads, reference yields, tender yields, total consideration and accrued interest per $1,000 principal amount of the notes as follows:

(1) Based on a payment date of March 23, 2011.

Holders who validly tendered and did not withdraw their notes on or prior to 5:00 p.m., New York City time, on March 8, 2011 (the “early participation date”), and whose notes were purchased pursuant to the tender offers, will receive the total consideration for such notes. Holders who validly tendered their notes after the early participation date, but prior to the expiration date, and whose notes were purchased pursuant to the tender offers, will receive the total consideration for such notes, less an early participation amount of $30.00 per $1,000 principal amount of notes. In addition, holders will receive accrued interest on the notes purchased pursuant to the tender offers.

Payment for notes tendered and accepted for purchase is expected to be made today, and all other notes tendered but not accepted for purchase will be returned to holders. Notes tendered at the respective clearing spreads for each series have been pro rated based on a pro ration factor of 21.40% for the Pool 1 notes and 13.70% for the Pool 2 notes.

Dow has retained Goldman, Sachs & Co. and J.P. Morgan Securities LLC, as Lead Dealer Managers, and ING Financial Markets LLC, RBC Capital Markets, LLC and Scotia Capital (USA) Inc., as co-Dealer Managers, for the tender offers. Global Bondholder Services Corporation is the Information Agent and Depositary for the tender offers. For additional information regarding the terms of the tender offers, please contact: Goldman, Sachs & Co. at (800) 828-3182 (toll-free) or (212)-902-5128 (collect) or J.P. Morgan Securities LLC at (866) 834-4666 (toll-free) or (212) 834-2494 (collect).

This press release does not constitute an offer to sell or purchase, or a solicitation of an offer to sell or purchase, or the solicitation of tenders or consents with respect to, any security. No offer, solicitation, purchase or sale was made in any jurisdiction in which such an offer, solicitation, or sale would be unlawful. The offers were being made solely pursuant to the Offer to Purchase and related documents made available to holders of the notes.

About Dow

Dow (NYSE: DOW) combines the power of science and technology with the “Human Element” to passionately innovate what is essential to human progress. The Company connects chemistry and innovation with the principles of sustainability to help address many of the world’s most challenging problems such as the need for clean water, renewable energy generation and conservation, and increasing agricultural productivity. Dow’s diversified industry-leading portfolio of specialty chemical, advanced materials, agrosciences and plastics businesses delivers a broad range of technology-based products and solutions to customers in approximately 160 countries and in high growth sectors such as electronics, water, energy, coatings and agriculture. In 2010, Dow had annual sales of $53.7 billion and employed approximately 50,000 people worldwide. The Company’s more than 5,000 products are manufactured at 188 sites in 35 countries across the globe. References to “Dow” or the “Company” mean The Dow Chemical Company and its consolidated subsidiaries unless otherwise expressly noted. More information about Dow can be found at www.dow.com.

Union Carbide Corporation is a chemicals and polymers company that has been a wholly owned subsidiary of The Dow Chemical Company since 2001.

Rohm and Haas Company is a premier specialty materials company and has been a wholly owned subsidiary of The Dow Chemical Company since 2009.

^®TM Trademark of The Dow Chemical Company (“Dow”) or an affiliated company of Dow

For editorial information:
The Dow Chemical Company
Rebecca Bentley, 989-638-8568
rmbentley@dow.com