Dow updates portfolio amidst divestment plans

Michigan, US-headquartered Dow Chemical Company is divesting US$4.5 billion to US$6 billion of non-strategic businesses and assets by 2015; in view of this, it has confirmed that its Angus Chemical Company, Sodium Borohydride and AgroFresh businesses are being actively marketed for divestment. Dow expects to complete signing of these transactions by year-end 2014, and close in early 2015. Collectively, these businesses are expected to yield proceeds greater than US$2 billion.

In addition, Dow has completed the sale of a substantial portion of its North America rail car fleet, moving to a lease structure going forward – an action that generated nearly US$450 million in cash proceeds.

Dow also carries out its planned carve-out of its US Gulf Coast Chlor-Alkali/Chlor-Vinyl, Global Chlorinated Organics and Epoxy businesses, which collectively are expected to generate EBITDA in excess of $500 million annually. Dow is now actively working to stand up the carve-out within a separate structure, with more details forthcoming. 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 2015.

To date, Dow’s completed divestiture actions total US$1.3 billion, and the expected proceeds of the entire programme will now be at the higher end of the company’s US$4.5 billion to US$6 billion range.

Meanwhile, Dow has signed a definitive agreement with ExxonMobil Chemical Company regarding an ownership restructure of Univation Technologies, LLC. Currently a 50/50 joint venture, Univation Technologies is the licensor of UNIPOL PE Process Technology and the leader in the development, manufacture and sales of PE catalysts for the UNIPOL PE Process – highly differentiated market-aligned solutions. This transaction will result in Univation Technologies becoming a wholly-owned subsidiary of Dow.

Dow’s Chair and CEO, Andrew N. Liveris said that through the actions taken by the firm and its plans in progress, it will have divested more than US$14 billion in non-strategic businesses since 2009, while at the same time adding US$18 billion in revenue via acquisitions and organically through targeted R&D, thus proving the firm’s focus on further accelerating its 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 even higher.


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