19.12.2016 • NewsDede WillamsDowChemical

Dow to Convert Preferred Shares

(c) Dow
(c) Dow

Dow Chemical has announced it will convert $4 billion worth of preferred shares held by Warren Buffett's Berkshire Hathaway investment vehicle and Kuwait's sovereign wealth fund into common equity.

Buffett, the billionaire US investor, purchased 3 million of Dow’s preferred shares for $3 billion in April 2009 to help the chemical giant finance its acquisition of chemical producer Rohm & Haas. Kuwait Investment Authority (KIA) bought 1 million of the company’s preferred shares for $1 billion.

Converting the shares with an annual dividend rate of 8.5% was made contingent on the Dow stock trading above $53.72 per share for any 20 trading days in a 30-day window. The share price recorded gains of nearly 10% in the past month.  After the conversion, Buffett will hold about 6% of the chemical company KIA around 2 percent.

According to the news agency Reuters, Dow has paid Buffett $255 million in dividends every year since the purchase, netting the investor gains about $1.8 billion since 2009. Kuwait Investment Authority netted nearly $600 million in the same period.

Following the conversion of the preferred shares, Dow will issue 96.8 million new common shares, representing nearly 9% of its 1.12 billion shares outstanding on Sept. 30.

Whitepaper

Excellence in Pharmaceutical Distribution and The Critical Role of Good Distribution Practice (GDP)
Setting the Standard

Excellence in Pharmaceutical Distribution and The Critical Role of Good Distribution Practice (GDP)

Are you ready to elevate your pharmaceutical operations? Download our exclusive whitepaper and discover how compliance with Good Distribution Practice (GDP) is essential for the safety and integrity of pharmaceuticals.

Free Virtual Event

Vaccine Manufacturing
Bioprocess Forum

Vaccine Manufacturing

Join global experts and innovators for a two-day virtual event exploring the latest breakthroughs and best practices in vaccine manufacturing. Discover how new technologies and process innovations are shaping the future of vaccine production, safety, and scalability.