US Dow Chemical adds three businesses to planned divestments

Stefan Baumgarten

02-Oct-2014

US Dow Chemical adds three businesses to planned divestmentsHOUSTON (ICIS)–Dow Chemical is “actively marketing” its Angus Chemical Company, Sodium Borohydride and AgroFresh businesses, the US-based chemicals major confirmed on Thursday in an update on its divestment plans.

Selling those three businesses is part of Dow Chemical’s plan to divest $4.5-$6.0bn of non-strategic businesses and assets by 2015. To date, Dow completed divestitures totalling $1.3bn. Proceeds from the full divestment programme are now expected to come in at  the higher end of the $4.5-$6.0bn range, the company said.

Dow Chemical said that it expects to sign transactions for the three businesses by the end of 2014. Collectively, the three businesses are expected to yield proceeds of more than $2bn.

Dow also said that it completed the sale of “a substantial portion” of its North America railcar fleet as it is moving to a lease structure. The sale of the railcar fleet generated $450m in cash so far.

Furthermore, Dow continues “to make solid progress” on the planned carve-out of its US Gulf Coast-based chlor-alkali, chlor-vinyls and chlorinated organics and epoxy businesses, it added.

“Dow is now actively working to stand up the carve-out within a separate structure, with more details forthcoming,” it said.

“The carve-out is receiving strong interest from the market and firm indications of interest are expected before year end, with signed agreements expected in early 2Q15 [second quarter of 2015],” it added.

Last month, Dow said that it may consider a Reverse Morris Trust transaction for the carve-out.

“Through the actions we have taken and the plans in progress, we will have divested more than $14bn in non-strategic businesses since 2009, while at the same time adding $18bn in revenue via acquisitions and organically through targeted R&D [research and development], thus proving our complete focus on further accelerating Dow’s continued commitment to going deeper into attractive end-markets within its integrated value chains and products – all while enhancing return on capital and driving TSR [total shareholder return] even higher,” said Dow’s CEO, Andrew Liveris.

Dow also said that under an agreement reached with ExxonMobil it will become sole owner of the two firms’ 50:50 Univation Technologies joint venture. Univation is a licensor of polyethylene (PE) technologies, and it produces PE catalysts.

Additional reporting by Al Greenwood

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