US Dow chlorine, epoxy carve out similar in size to Styron

02 December 2013 21:15  [Source: ICIS news]

HOUSTON (ICIS)--Dow Chemical's announcement on Monday of a carve-out of its chlorine, chlorinated organics and epoxy resins businesses will be similar in size to its earlier carve out of Styron, the company's styrenics business.

Dow ultimately sold Styron in 2010 to Bain Capital for $1.63bn (€1.21bn).

Based on 2009 data, Styron reported revenue of $3.7bn. At the time, Styron had more than 40 plants at 20 sites in 13 countries as well as about 1,500 employees.

Dow has said that it will rely on its experience with Styron as it carves out its chlorine, chlorinated organics and epoxy resins business.

Dow is preparing the three for a sale, a joint venture or a spin-off in what could be several deals.

The company did not specify the details, but it expects to complete the deals in the next 12-24 months.

The carve-out represents up to $5bn of the company's total revenue. It includes approximately 40 manufacturing facilities at 11 sites and almost 2,000 employees.

It will be a complex carve-out, as Dow's polyurethanes (PUs) and agricultural chemicals businesses rely on chlorine, said Rebecca Bentley, a company spokeswoman.

Dow intends to rely on supply and purchase agreements to maintain the integration benefits it currently enjoys as a chlorine producer.

This recent carve-out is significant, as it represents 15% of the company's net property, Bentley said. Plus, Dow has been producing chlorine for more than a century.

($1 = €0.74)

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By: Al Greenwood
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