UpdateUS Dow prepares styrenics, aromatics units for sale

30 July 2009 21:47  [Source: ICIS news]

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HOUSTON (ICIS news)--Dow Chemical plans to spin off its styrenics and aromatics businesses into a new company called Styron as part of an effort to make them better suited for sale, the US major said on Thursday.

In a conference call with analysts, CEO Andrew Liveris said Styron would be valued at $1bn-2bn (€710m-1.42bn) and would be comprised of the company’s polycarbonate (PC), acrylonitrile butadiene styrene (ABS)/styrene acrylonitrile (SAN) resins, polystyrene (PS) and styrene monomer operations.The company will have its own chief executive and chief financial officers and will operate with about 1,500 employees and 40 locations worldwide.

“Carving these businesses out as separate should make them more attractive to potential acquirers,” Liveris said. “We intend to form a subsidiary at some point in the near future.”

The business will initially be a part of Dow, but should transition to a different ownership structure in the future, the US major said.

“We believe we have better businesses in our new portfolio,” Liveris said. “[Styron] can grow in the emerging world, with a new ownership structure that can better focus on feeding that growth. It’s quite possible we could partner where we’re a minority owner.”

Dow spokesman David Winder said the company’s stake in the Americas Styrenics joint venture with Chevron Phillips Chemical would be transferred to Styron.

The creation and potential sale of Styron is part of Dow’s plan to raise $23bn-26bn in asset sales to pay down debt related to the company’s acquisition of Rohm and Haas.

Dow said it was on track to divest at least $4bn of that by the end of 2009, with agreements for $3.3bn in divestments already in place.

Shares of Dow, which beat analyst predictions for its second-quarter earnings, closed at $21.53 on the New York Stock Exchange, up 6.2%.

($1 = €0.71)

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By: Ben DuBose
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