The Dow Chemical Co. recently announced it has signed a definitive agreement under which Dow’s global Polypropylene business will be divested to Braskem for a total enterprise value to Dow of $340 million, comprising a $323 million cash purchase price plus other cash and contingency assumptions of $17 million.
“This divestiture is yet another strong example of Dow’s disciplined and ongoing approach to portfolio management, and is directly aligned with our strategy to transform our Performance Plastics franchise to focus on downstream, technology-differentiated solutions,” said Andrew N. Liveris, chairman and CEO of Dow. “This business has delivered historic margins that do not meet our expectations moving forward and is no longer core to Dow’s strategy. We are shifting our Plastics portfolio from a commodity focus to that of a performance focus. This divestment is directly in line with that strategy, and allows us to continue to focus on our three main priorities: retiring debt, remunerating shareholders and investing in our innovation agenda so that we deliver consistent earnings growth.”
The divestiture includes Dow’s polypropylene manufacturing facilities at Schkopau and Wesseling, Germany, and Freeport and Seadrift, Texas. Also included are inventory, certain product and process technology, and customer contracts and lists.
Approximately 200 employees are expected to transition employment status to Braskem at the close of the transaction. Dow’s Polypropylene Licensing & Catalyst business and related catalyst facilities are excluded from the scope of the transaction. Under terms of the purchase agreement, Braskem will honor customer and supplier contracts and related agreements.
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Dow Sells Global Polypropylene Business to Braskem
August 8, 2011