Reliance JV could be positive for Dow - Citigroup
15 March 2007 16:29 [Source: ICIS news]
TORONTO (ICIS news)--A joint venture between Dow Chemical and India’s Reliance Industries with Reliance taking a stake in Dow’s underperforming commodities business would be a positive for Dow, Citigroup said on Thursday.
The analysts were commenting on Indian media reports that the two companies were close to an agreement on such a joint venture.
“Although speculation at this point, if executed, we see this as a positive for Dow because investors have been waiting for Dow to take some action on its ‘asset light’ strategy, which Dow has been expounding for about a year now,” Citigroup said in a research note to clients.
Citigroup said its analysis showed that Dow could receive up to $21bn (€16bn) from Reliance, which it could use to acquire specialty chemicals assets, repay debt or buy back shares.
Midland, Michigan-based Dow does not, as matter of company policy, comment on media speculation.
Citigroup has a share price target of $43/share for Dow Chemical.
The shares were priced at $46.08, up 6.22%, in Thursday morning trading in
($1 = €0.76)
By: Stefan Baumgarten
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