Shearman & Sterling and Cravath Swaine & Moore have won lead spots advising as Dow Chemical spins off nearly all of its chemical business for $5bn (£3.4bn) to smaller rival Olin Corporation.

Dow and Olin announced on Friday (27 March) that the boards of directors of both companies unanimously approved the agreement.

Under the terms of the deal Dow's chemical business will be spun out from the parent company and Dow will retain 50.5% of the chemical business' shares.

Dow will get $2bn (£1.4bn) in cash and cash equivalents and $2.2bn (£1.5bn) in Olin shares, while Olin will take on $800m (£541m) of pension and other liabilities.

Shearman is advising Dow on the transaction, with a New York team led by M&A partner George Casey.

In 2011 Shearman represented longstanding client Dow in its joint venture with Saudi Arabian Oil Company (Saudi Aramco) to build a $20bn (£13.5bn) petrochemical plant at the Arabian Gulf port of Jubail.

The team was led by the firm's London and Abu Dhabi offices, and included project development and finance partners Nick Buckworth and Ben Shorten, along with partner Iain Elder.

Cravath is acting for Olin, while Cleary Gottlieb Steen & Hamilton is advising Dow on antitrust matters. Its antitrust team includes Washington partner George Cary and Cologne partner Dirk Schroeder.