Dow completes Carbide merger, touts PE strengths

07 February 2001 01:11  [Source: ICIS news]

HOUSTON (CNI)--Dow Chemical completed its merger with Union Carbide Tuesday and said the closing improves Dow's position as a leading polyethylene (PE) supplier with "the strength and resources needed to more effectively compete in today's global marketplace."

Dow spokesmen said company officials spent the day effecting the absorption of Union Carbide, which from today exists as a wholly-owned subsidiary of Dow. The deal won US regulatory approval late Monday.

Len Azzaro, Dow global vice president for PE, said the combination of Dow and Carbide - "two of the world's most technologically advanced chemical companies" - will position Dow with an enhanced technology platform and one of the industry's broadest ranges of PE solutions.

Dow said in a statement marking the merger completion that in addition to retaining its Insite technology, the merger gives Dow full access to Unipol PE gas phase process and catalyst technology assets owned by Univation Technologies (UT), in which Dow is now a co-owner with ExxonMobil Chemical. Dow noted too that it will retain income from the divested businesses for licenses entered into prior to the formation of UT, and that UT becomes the "sole interface" for gas phase PE licensing and gas phase PE catalysts for existing Unipol licensees.

Noting that as part of the divestments required by the US Federal Trade Commission (FTC) it has agreed to transfer to BP Amoco patents and assets related to metallocene catalyst technology in gas phase PE processes for which Dow and BP formerly had a joint development agreement, Dow also noted that the agreement "refers to a limited segment of existing Dow PE technology only" and that Dow retains "all of its ownership and rights to practice metallocene technology (Insite) in its solution process."

Dow said the merger brings together two of the world's most diversified PE product portfolios and will allow Dow to participate in "virtually every segment in which PE resin is used," including agricultural films, bottles, tubes, consumer packaging, fibres, food packaging and coatings, health and hygiene films, plastic pipe, sheet and membranes, and shrink and stretch films, toys and play equipment, among others.

In addition, Midland, Michigan-based Dow hailed the merger's considerable additions to Dow's manufacturing base, bringing the company's global nameplate production capacity to 8.2m tonne/year.

Azzaro observed that the "PE industry has been in a state of consolidation for some time," and that the Dow-Carbide merger "will help Dow remain competitive globally."

"Competition is still fierce," Azzaro said, "with more than a dozen major producers of PE resin in the fight for their share of the potential market."

Dow will hold a press conference Wednesday to cover other aspects of the completed merger.


By: Joe Kamalick
+1 713 525 2653



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