Dow Acquires Wolff Walsrode from Bayer

The Dow Chemical Company and the Bayer Group today announced the closing of Dow’s acquisition of Wolff Walsrode. The purchase price of EUR 540 million (approximately USD 725 million) includes a cash component and the assumption of financial debt and pension commitments. Following regulatory clearance from various authorities around the world, payment and share transfers have occurred, and Dow has taken full ownership of the Wolff Walsrode group of companies on June 30, 2007.
The acquisition will deliver considerable top line synergies for Dow, driven by application expertise and worldwide growth in demand for cellulosics. The acquisition is expected to be financially accretive by the end of the first year of ownership.

“The Wolff transaction marks another important milestone in our Company’s drive to expand and enhance our performance business portfolio,” said Andrew Liveris, chairman and CEO of The Dow Chemical Company. “The acquisition of Wolff Walsrode is our latest example of how Dow is delivering on a transformational growth strategy. Wolff is a strategically aligned acquisition that brings new expertise and customer focus to accelerate Dow’s growth in key specialty markets.”

For Bayer, the transaction fits with its objectives of securing a recognized buyer committed to further develop the Wolff Walsrode business. “With The Dow Chemical Company we found a buyer that offers promising perspectives for the future of Wolff,” said Bayer management board chairman Werner Wenning. The cash inflows of approximately EUR 440 million (~USD 590 million) are intended to be used to reduce Bayer’s net debt
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Dow plans to combine Wolff with its Water Soluble Polymers business to create a new specialty business driven to become the preferred development partner and premier application expert in the cellulosics industry. Cellulosics and derivatives are widely used in formulations for food, personal care, pharmaceuticals, construction, paint and a variety of specialty industrial applications. The business will cater to formulators and brand owners whose end product label claims are underpinned by advanced cellulosics.

About Dow
Dow is a diversified chemical company that harnesses the power of innovation, science and technology to constantly improve what is essential to human progress. The Company offers a broad range of products and services to customers in more than 175 countries, helping them to provide everything from fresh water, food and pharmaceuticals to paints, packaging and personal care products. Built on a commitment to its principles of sustainability, Dow has annual sales of US$49 billion and employs 43,000 people worldwide. 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.

Bayer: Science For A Better Life
Bayer is a global enterprise with core competencies in the fields of health care, nutrition and high-tech materials. The company’s products and services are designed to benefit people and improve their quality of life. At the same time Bayer creates value through innovation, growth and improved earning power. The Group is committed to the principles of sustainable development and acknowledges and accepts its role as a socially and ethically responsible “corporate citizen”. Economy, ecology and social responsibility are corporate policy objectives of equal rank. In fiscal 2006, Bayer employed 106,000 people and had sales of around €29 billion. Capital expenditures amounted to €1.7 billion, the R&D budget to €2.3 billion. More information is available on the Internet at www.bayer.com