NEW YORK (TheStreet) --Olin Corp. (OLN) - Get Report shares are rising sharply, up 22.14% to $33.21, in early market trading on Friday after the company announced that it is merging with Dow Chemical's (DOW) - Get Report chlorine unit spin off in a deal valued at $5 billion.

The deal combined with the company's other divestitures allows Dow to exceed its goal of spinning off between $7 billion and $8.5 billion of non-strategic business assets, according to Reuters.

The merger involves Dow's U.S. Gulf Coast chlor-alkali and vinyl, global chlorinated organics and global epoxy businesses with $2 billion of cash and cash equivalents to be paid to Dow, with an estimated $2.2 billion in Olin common stock and about $800 million of pension assumptions and other liabilities. Dow shareholders will own 50.5% of Olin's shares following the merger.

Olin said that it plans to save about $200 million annually on the deal while the newly formed company is expected to generate about $7 billion in revenue annually. The deal is expected to receive approval from Olin's shareholders and be completed by the end of the year.

"We have jointly created a solid foundation for success for Olin, driven by the benefits of greater scale, an enhanced ability to capitalize on globally advantaged cost positions backed by U.S. shale gas economics, technology advantages, broader market access and significant envelope integration," said Dow CEO Andrew Liveris.

TheStreet Ratings team rates OLIN CORP as a Buy with a ratings score of B. TheStreet Ratings Team has this to say about their recommendation:

"We rate OLIN CORP (OLN) a BUY. This is driven by several positive factors, which we believe should have a greater impact than any weaknesses, and should give investors a better performance opportunity than most stocks we cover. The company's strengths can be seen in multiple areas, such as its largely solid financial position with reasonable debt levels by most measures, reasonable valuation levels and increase in stock price during the past year. We feel these strengths outweigh the fact that the company has had sub par growth in net income."

Highlights from the analysis by TheStreet Ratings Team goes as follows:

• The debt-to-equity ratio is somewhat low, currently at 0.67, and is less than that of the industry average, implying that there has been a relatively successful effort in the management of debt levels. Along with the favorable debt-to-equity ratio, the company maintains an adequate quick ratio of 1.43, which illustrates the ability to avoid short-term cash problems.
• OLIN CORP's earnings per share declined by 48.4% in the most recent quarter compared to the same quarter a year ago. The company has suffered a declining pattern of earnings per share over the past two years. However, we anticipate this trend to reverse over the coming year. During the past fiscal year, OLIN CORP reported lower earnings of $1.32 versus $2.21 in the prior year. This year, the market expects an improvement in earnings ($1.65 versus $1.32).
• OLN, with its decline in revenue, slightly underperformed the industry average of 4.8%. Since the same quarter one year prior, revenues fell by 11.1%. Weakness in the company's revenue seems to have hurt the bottom line, decreasing earnings per share.
• In its most recent trading session, OLN has closed at a price level that was not very different from its closing price of one year earlier. This is probably due to its weak earnings growth as well as other mixed factors. Turning our attention to the future direction of the stock, it goes without saying that even the best stocks can fall in an overall down market. However, in any other environment, this stock still has good upside potential despite the fact that it has already risen in the past year.
• You can view the full analysis from the report here: OLN Ratings Report

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