Olin (NYSE:OLN) said it expects to close its planned merger with Huntsman in the first quarter of 2027, after clearing the Hart-Scott-Rodino waiting period in the U.S. and receiving approvals in several other jurisdictions. Regulatory reviews remain underway in Europe, China and other regions.
President and CEO Ken Lane said the companies have accelerated pre-closing integration planning and continue to expect more than $400 million in cost synergies and integration benefits. Of that total, Lane said he has a “very high level of confidence” in $300 million tied to fixed-cost, overhead and efficiency opportunities. The remaining $100 million is related to chlorine supply and is expected to begin in 2030.
Following the transaction’s completion, the combined company is expected to trade under the ticker symbol OHN. Lane said Olin is designing the combined organization around industry benchmarks, with a focus on lean operations, accountability and incentives tied to results.
Freeport Returns to Normal Operations
In Olin’s Chlor Alkali Products and Vinyls, or CAPV, segment, the company returned its Freeport vinyl chloride monomer, or VCM, assets to normal operations in mid-September as planned. Reduced operating rates associated with the Freeport situation created an approximately $30 million negative impact during the third quarter, according to Lane.
CFO Todd Slater said the VCM disruption represented roughly a $32 million year-over-year headwind in the third quarter. He said the impact should become a tailwind in the fourth quarter, although CAPV will face approximately $25 million in sequentially higher turnaround costs. Olin also expects elevated Chlor Alkali turnaround costs in the first quarter of 2027.
Domestic caustic soda prices improved slightly from the second quarter, while export pricing was pressured by elevated Chinese supply. Lane said rising freight costs in Asia, tied to conditions in the Middle East, have begun to improve the competitive position of U.S. Gulf Coast exports to Europe and Latin America. He said freight increases for Asian caustic soda exports to those regions have exceeded $80 to $100 per ton.
The company has announced caustic soda price increases and expects to realize them in the first quarter of 2027. Lane said Olin expects caustic markets to tighten as lower seasonal chlorine demand reduces production and as higher freight, feedstock and energy costs constrain global supply.
Olin expects fourth-quarter domestic caustic pricing to decline sequentially, along with seasonally lower water-treatment and construction demand. The company also anticipates higher-than-normal year-end customer destocking.
Epoxy Actions and Winchester Contract Awards
Lane said Olin’s epoxy business continued to benefit from structural cost actions, margin management and growth in higher-value formulated solutions used in electronics, composites and coatings. The company has raised prices and implemented fuel surcharges across regions and shipping modes to address rising feedstock, diesel and transportation costs.
Olin expects its epoxy segment to incur a $30 million sequential increase in turnaround costs in the fourth quarter. Lane said many of the maintenance activities occur once every five years, while 2027 is expected to have very low epoxy plant turnaround costs.
The company is also supporting potential European safeguard protections intended to address subsidized Asian overcapacity in composites-related materials. Lane said such measures, if adopted, could benefit epoxy resins and related systems supplied to automotive, wind energy, aerospace and defense markets.
At Winchester, Olin reported year-over-year improvement in outdoor commercial ammunition demand and growing commercial order backlog. Lane said the company has maintained a make-to-demand approach and that the balance among channel inventories, consumer demand and production is healthier than it was a year earlier.
Winchester received more than $1 billion of military contract awards during the quarter, including approximately $600 million to equip a new Lake City 6.8mm ammunition facility. The business delivered its first shipment of Lake City-produced 6.8mm rounds to the U.S. military during the month. Winchester also received a renewed five-year second-source supply contract, with an initial $50 million delivery value over the next 12 months, covering ammunition produced at its Oxford, Mississippi, and East Alton, Illinois, facilities.
Lane said commercial ammunition margins remain below historical levels amid higher costs for copper, zinc, lead and other materials. The company expects seasonally lower demand and higher copper costs to weigh on fourth-quarter Winchester results, while defense business is expected to improve sequentially.
Outlook, Liquidity and Cost Program
Olin forecast fourth-quarter adjusted EBITDA of $80 million to $100 million and full-year 2026 adjusted EBITDA of approximately $550 million to $570 million.
The company ended the quarter with $1.3 billion of available liquidity and no restrictions on the undrawn portion of its revolving credit facility. Slater said Olin executed a new credit agreement intended to support the combined company after the Huntsman merger closes.
Olin expects year-end net debt to exceed its 2025 level because of legacy litigation payments and merger-related costs, with year-end leverage expected at approximately five times or slightly higher. The company paid about $114 million to Shintech for legacy litigation obligations through the end of the third quarter and does not expect additional payments this year.
Capital spending is expected to total approximately $200 million in 2026. Olin also said it expects to continue its quarterly dividend, with the next payment marking 100 consecutive years of quarterly dividends.
Its Beyond250 cost-reduction program remains on track to deliver $110 million to $120 million of incremental structural savings in 2026. Olin expects annual savings to exceed its original $250 million target by 2028, with an additional $60 million to $80 million of savings expected in 2027.
About Olin (NYSE:OLN)
Olin Corporation (NYSE: OLN) is a global manufacturer of chemicals and ammunition. The company operates through three primary businesses: Chlor Alkali Products and Vinyls, Epoxy, and Winchester.
Its Chlor Alkali Products and Vinyls business produces chlorine, caustic soda, hydrochloric acid, bleach products, hydrogen, chlorinated organic chemicals and other related materials used in industrial, water-treatment, construction and consumer applications. Olin’s Epoxy business manufactures epoxy resins, intermediates and other specialty materials used in coatings, adhesives, composites, electronics and infrastructure-related applications.
Through its Winchester business, Olin produces and distributes sporting ammunition, reloading components, and small-caliber ammunition for law enforcement and military customers.
