Dow Chemical Company (The) -- Moody's: Dow's agreement with Third Point will reduce near term shareholder pressure, but risks remain

New York, December 01, 2014 -- Moody's Investors Service stated that the support agreement signed between The Dow Chemical Company (Baa2, stable) and Third Point Capital is a modest credit positive as it eliminates the potential for a proxy fight in the spring of 2015, contains a number of standstill conditions that Third Point must adhere to, and should prevent Third Point from making comments that disparage the company or its management until 2016. This agreement will allow Dow's management to focus on improving profitably ($1 billion three year cost reduction program), divesting non-core businesses (target increased to $7.0-8.5 billion of proceeds by 2016), completing planned capital projects that will meaningfully improve profitability ($3 billion of additional EBITDA by 2018) and maximizing organic growth and profitability in its core businesses.

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