No, the number of shares you own will not change as a result of the distribution. Immediately following the distribution, you will hold the same number of shares of DowDuPont, that you held immediately prior to the distribution. Your proportionate interest will also not change, so you will own the same proportionate amount of DowDuPont immediately following the separation and distribution that you owned of DowDuPont immediately prior to the separation and distribution.
How many shares of Dow common stock will be distributed?
The actual number of shares of Dow common stock that will be distributed will depend on the number of shares of DowDuPont common stock outstanding as of the close of business on the record date. The shares of Dow common stock that are distributed will constitute all of the then issued and outstanding shares of Dow common stock immediately prior to the distribution and DowDuPont will not retain any ownership interest in Dow following the distribution. For more information on the shares being distributed, see the section entitled “Description of Dow’s Capital Stock.”
When will the distribution occur?
It is expected that the distribution will be effected following the close of trading on the NYSE on April 1, 2019, which Dow refers to as the “distribution date,” subject to the satisfaction or waiver of certain conditions. On or shortly after the distribution date, the whole shares of Dow common stock will be credited in book-entry accounts for each stockholder entitled to receive shares of Dow common stock in the distribution. No share certificates will be issued with respect to the shares distributed in the distribution. Dow expects DowDuPont’s distribution agent to take approximately two weeks after the distribution date to fully distribute to stockholders any cash they are entitled to receive in lieu of fractional shares. See “—How will I receive my shares of Dow common stock?” for more information.
If I sell my shares of DowDuPont common stock on or before the distribution date, will I still be entitled to receive shares of Dow common stock in the distribution?
If you are a DowDuPont stockholder on the record date and decide to sell your shares on or before the distribution date, you may choose to sell your DowDuPont common stock with or without your entitlement to receive Dow common stock in the distribution. Beginning on or shortly before the record date and continuing up to and including the distribution date, it is expected that there will be two markets in DowDuPont common stock: a “regular-way” market and an “ex-distribution” market. Shares of DowDuPont common stock that are traded in the “regular-way” market will trade with the entitlement to receive the Dow common stock that is distributed pursuant to the distribution. Shares that trade in the “ex-distribution” market will trade without the entitlement to receive the shares of Dow common stock distributed pursuant to the distribution. Consequently, if you sell your shares of DowDuPont common stock in the “regular-way” market on or prior to the distribution date, you are also selling your right to receive Dow common stock in the distribution.
You should discuss these alternatives with your bank, broker or other nominee. See the section entitled “The Distribution—Trading Between the Record Date and Distribution Date.”
How will I receive my shares of Dow common stock?
Registered stockholders: If you are a registered stockholder (meaning you own your shares of DowDuPont common stock directly through an account with DowDuPont’s transfer agent, Computershare), the distribution agent will credit the whole shares of Dow common stock you receive in the distribution to a book-entry account with Dow’s transfer agent on or shortly after the distribution date. Approximately two weeks after the distribution date, the distribution agent will mail you a book-entry account statement that reflects the number of whole shares of Dow common stock you own, along with a check for any cash in lieu of fractional shares you were entitled to receive. You will be able to access information regarding your book-entry account holding the shares of Dow common stock at Computershare using the same credentials that you use to access your DowDuPont account. You may also contact Computershare at 1-800-369-5606 (U.S. & Canada) or 1-201-680-6578 (outside the U.S. & Canada).
Beneficial stockholders: If you own your shares of DowDuPont common stock beneficially through a bank, broker or other nominee, your bank, broker or other nominee will credit your account with the whole shares of Dow common stock you receive in the distribution on or shortly after the distribution date. Your bank, broker or other nominee will also be responsible for transmitting to you any cash payment you are entitled to receive in lieu of fractional shares. Please contact your bank, broker or other nominee for further information about your account and the payment of any cash you are entitled to receive in lieu of fractional shares.
The shares of Dow common stock will not be certificated. As a result, no physical stock certificates will be issued to any stockholders. See “The Distribution—When and How You Will Receive the Distribution” for a more detailed explanation.
What are the U.S. federal income tax consequences of the distribution to me?
The distribution is conditioned on the continued validity of the IRS Ruling, which DowDuPont has received from the IRS, and the receipt of the Tax Opinions, in form and substance acceptable to DowDuPont and Dow, as applicable, substantially to the effect that, among other things, the distribution, together with certain related transactions, will qualify as a tax-free transaction under Section 355 and Section 368(a)(1)(D) of the Code. Assuming the distribution so qualifies, for U.S. federal income tax purposes, no gain or loss will be recognized by you, and no amount will be included in your income, upon the receipt of shares of Dow common stock pursuant to the distribution. However, any cash payments made instead of fractional shares will generally be taxable to you. For a more detailed description, see the section entitled “The Distribution—Material U.S. Federal Income Tax Consequences of the Distribution.”
How will the distribution affect my tax basis in my shares of DowDuPont common stock?
Assuming that the distribution is tax-free to DowDuPont stockholders (except for taxes related to any cash received in lieu of fractional shares), your tax basis in the DowDuPont common stock held by you immediately prior to the distribution will be allocated between your shares of DowDuPont common stock (which now reflect ownership of New DuPont) and the Dow common stock that you receive in the distribution in proportion to the relative fair market values of each immediately following the distribution. For a more detailed description, see the section entitled “The Distribution—Material U.S. Federal Income Tax Consequences of the Distribution.”
Will my shares of DowDuPont common stock continue to trade following the distribution?
Your DowDuPont common stock will continue to trade on the NYSE.
How will the distributions of Dow and Corteva affect the operations of DowDuPont?
Following the distribution, the remaining company will continue to hold both DowDuPont’s agriculture and specialty products business. Following the subsequent distribution of Corteva, New DuPont will then continue to operate the specialty products business of DowDuPont.
How will Dow common stock trade?
Dow common stock will trade on the NYSE under the symbol “DOW.”
Dow anticipates that trading in Dow common stock will begin on a “when-issued” basis shortly before the record date for the distribution and will continue through the distribution date. When-issued trading in the context of a separation refers to a sale or purchase made conditionally on or before the distribution because the securities of the separated entity have not yet been distributed. When-issued trades generally settle within two days after regular-way trading commences following the distribution. On the first trading day following the distribution date any when-issued trading of Dow common stock will end and “regular-way” trading will begin. Regular-way trading refers to trading after the security has been distributed and typically involves a trade that settles on the second full trading day following the date of the trade. See the section entitled “The Distribution— Trading Between the Record Date and Distribution Date.” Dow cannot predict the trading prices for its common stock before, on or after the distribution date.
Will the separation affect the trading price of my DowDuPont common stock?
Dow expects the trading price of shares of New DuPont common stock immediately following the distribution to be lower than the trading price of DowDuPont common stock immediately prior to the distribution because the trading price will no longer reflect the value of the materials science business. Furthermore, until the market has fully analyzed the value of New DuPont without Dow and the value of Dow as a standalone company, the trading price of shares of both companies may fluctuate. There can be no assurance that, following the distribution, the combined trading prices of the common stock of Dow and New DuPont will equal or exceed what the trading price of DowDuPont common stock would have been in the absence of the separation, and it is possible that the combined equity value of New DuPont and Dow will be less than DowDuPont’s equity value prior to the distribution.
In addition, assuming New DuPont completes the distribution of Corteva, there can be no assurance that, following such distribution, the combined trading prices of the Dow common stock and the common stock of Corteva and New DuPont will equal or exceed what the trading price of DowDuPont common stock would have been in the absence of DowDuPont’s pursuit of the separations, and it is possible the aggregate equity value of the three independent companies will be less than DowDuPont’s equity value prior to the distribution.
Are there risks associated with owning shares of Dow common stock?
Yes. Dow’s business is subject to both general and specific risks, including risks relating to Dow’s business, Dow’s relationship with New DuPont and Corteva following the separation and distribution and of Dow being a separate, publicly traded company. Accordingly, you should read carefully the information set forth in the section of Dow’s Form 10 entitled “Risk Factors.”
Does Dow intend to pay cash dividends?
Following the distribution, Dow intends to pay a cash dividend of $2.1 billion in the aggregate on an annualized basis. On March 7, 2019, the Dow board of directors declared Dow’s initial quarterly cash dividend of $525 million in the aggregate, which will be paid on June 14, 2019 pro rata to holders of record of Dow common stock as of the close of business on May 31, 2019. The declaration, payment and amount of any dividends following the distribution will be subject to the sole discretion of Dow’s post-distribution, independent board of directors and, in the context of Dow’s financial policy, will depend upon many factors, including Dow’s financial condition and prospects, Dow’s capital requirements and access to capital markets, covenants associated with certain of Dow’s debt obligations, legal requirements and other factors that the Dow board of directors may deem relevant, and there can be no assurances that Dow will continue to pay a dividend in the future. There can also be no assurance that, after the distribution, the combined annual dividends on the common stock of Dow, New DuPont and Corteva, if any, will be equal to the annual dividends on DowDuPont common stock prior to the distribution.
Who is the transfer agent and registrar for Dow common stock?
Following the separation and distribution, Computershare will serve as transfer agent and registrar for the Dow common stock. Computershare currently serves as DowDuPont’s transfer agent and registrar. In addition, Computershare will serve as the distribution agent in the distribution and will assist DowDuPont in the distribution of Dow common stock to DowDuPont stockholders.
Where can I get more information?
If you have any questions relating to the mechanics of the distribution, you should contact Computershare, as the distribution agent at:
1-800-369-5606 (U.S. & Canada) or 1-201-680-6578 (outside the U.S. & Canada)
After the separation and distribution, if you have any questions relating to Dow, you should contact Dow at:
1-800-422-8193 or 1-989-636-1463
After the separation and distribution, if you have any questions relating to DowDuPont, you should contact DowDuPont at:
1-302-774-4994 (for Institutional Holders)
1-302-774-3034 (for Individual Holders)
Pension & Benefits
What will happen to the U.S. qualified pension plans as a result of Dow’s separation from DowDuPont?
Both the Dow Employees’ Pension Plan (DEPP) and the Union Carbide Employees’ Pension Plan (UCEPP) will be retained by Dow.
- For retirees, this means that your benefits will continue to be paid from the same sources as before.
- For active heritage Dow employees continuing with Dow, the transaction does not affect your pension benefits.
- For active employees transferring to Corteva or DuPont, this means that your vested accrued benefits as of Dow’s separation from DowDuPont will remain with the Dow plan where they currently reside today – and you can commence your retirement benefit based on the current plan rules.
IRS and Department of Labor rules strictly protect a participant's rights to his or her vested accrued benefit. An "accrued pension benefit" is the benefit that an employee has earned as of a particular day.
Accrued benefits for U.S. tax-qualified pension plans are held in trusts that are separate legal entities from both Dow and DuPont. Qualified U.S. pension benefits are protected under federal law, and the plans must meet their obligation to existing pensioners and other plan participants with the assets held in the trust. The protection under federal law prohibits plans from using pension assets for any purpose other than paying benefits and qualified plan expenses.
What will happen to my U.S. retiree medical benefits?
As with pension, Dow will continue to be responsible for retiree medical, including RHCAP, for all heritage Dow employees and retirees. For current retirees and continuing Dow employees, this means that there will be no change to the benefits you are currently eligible for due to the transaction. For active heritage Dow employees transferring to Corteva and DuPont, you will receive benefits under Dow’s retiree medical programs, including RHCAP, for which you are eligible, based on your age and service at the date Dow separates from DowDuPont. Further, transferring employees within 6 months of achieving retiree medical eligibility will be granted eligibility in the plans for which they are eligible.
How well funded are my U.S. qualified pension benefits?
Outside of the protections afforded by law described above, Dow remains committed to meeting its obligations to our current and future pensioners. In fact, Dow has so far contributed nearly $1.3 billion to its U.S. qualified plans in 2018, which has increased the overall funded level of these plans. Globally, Dow has contributed approximately $1.5 billion to its pension plans in 2018 through the end of Q3.
Information related to the funded status of the U.S. plans can be found in the Annual Funding Notices located on Dow’s intranet or the DowFriends website.
You announced a $1.1 billion contribution, but note that you have contributed $1.5 billion globally year to date. When did you contribute the $400MM difference?
The plans were funded throughout the year and contributions are reflected in our quarterly financial statements as they are made.
With the contributions, what is the current funded status of Dow’s pension plans?
Globally, this contribution improved Dow’s funded global status on a GAAP basis from approximately 76.7% funded to 80.4% funded.
An 80% funding level is lower than your peers/other Fortune 100 companies. What is the timeframe to increase the funding status?
Dow has both funded and unfunded defined benefit pension plans that cover employees in the United States and a number of other countries. Accordingly, we do not target a specific global funding percentage, but follow an overriding funding policy to contribute to defined benefit pension plans when pension laws and/or economics either require or encourage funding.