Corning said it will swap its stake in Dow Corning for $4.8 billion in cash and a stake in chip company Hemlock Semiconductor Group, a venture of Dow Corning.
Formed in 1943, the 50-50 joint venture between the two companies produces silicon-based products for aerospace, automotive and electrical industries.
The transaction is expected to yield more than $1 billion in additional annual EBITDA at full run-rate synergies, Dow Chemical said.
The announcement comes as Dow and rival DuPont DD.N agreed to merge in an all-stock deal on Friday, valuing the combined company at $130 billion.
Dow said in October it might buy Corning’s stake in Dow Corning and restructure other JVs.
The transaction, expected to close in the first half of 2016, will help Dow capture $400 million in cost savings from the restructured ownership.
Dow and Corning will maintain their current equity stake in Hemlock, Shin-Etsu Handotai and Mitsubishi Materials Corp - and Norway’s Renewable Energy.
(This version of the story corrects headline and paragraph 1 to say Dow Chemical will assume full control of the joint-venture, not buy the remaining stake in the joint-venture. Adds explanatory paragraph 2.)
Reporting by Sneha Banerjee in Bengaluru; Editing by Saumyadeb Chakrabarty