Sector News

Dow Chemical may try to sell copolymer unit

October 17, 2016
Energy & Chemical Value Chain

Midland-based Dow Chemical Co. is seeking a buyer for a unit that makes copolymers used in food packaging in what will be the first disposal of many needed to gain antitrust approval for its $59 billion merger with U.S. chemicals maker DuPont Co., according to people with knowledge of the situation.

The company has hired a financial adviser to manage the sale of the business, which generates about $150 million in annual revenue supplying ethylene acrylic acid copolymers, said the people, who asked not to be identified because details of the process are private. Wilmington, Delaware-based DuPont is also drawing up a list of potential disposals, said the people.

Representatives for DuPont and Dow declined to comment.

Dow and DuPont are pushing to complete their planned merger by the end of the year, and competitors are circling for any assets that are cast off to remove any overlaps that regulators could use to block the deal. The combined company plans to split into three independent and more focused businesses. In doing so, they would create the world’s largest packaging polymers supplier slated to be part of a division run by Dow CEO Andrew Liveris.

The copolymers business has high profit margins and is likely to fetch several hundred million dollars, said one of the people. Initial documents to market the business have been sent to prospective bidders, they said.

Dow’s packaging and specialty plastics business has been one of the company’s best performers this year, posting record earnings and sales volumes in the second quarter, Chief Financial Officer Howard Ungerleider told investors on July 28.

While shareholders of both Dow and DuPont approved the 50-50 combination, regulators still have to rule on the deal. The European Commission requested missing data about the merger, threatening to delay its probe into the plan. Liveris said July 28 that the two companies are “deep” into the regulatory process, with “all sorts of thoughts on how we can get to close by year-end.”

Aside from packaging, there are possible overlaps in agrochemicals, seeds and industrial polymers, according to Jennifer Rie, a senior litigation analyst at Bloomberg Intelligence.

By Andrew Noel, Bloomberg

Source: Crain’s Detroit Business

comments closed

Related News

March 24, 2024

Thomas Gangl leaves Borealis

Energy & Chemical Value Chain

Appointed Borealis CEO in 2021, Thomas has led key initiatives including the sale of the nitrogen business, acquisitions of Rialti Spa and Integra Plastics AD, and Borouge’s IPO. He also made the final investment decision for the Borouge 4 plant, set to be the world’s largest polyolefin complex.

March 24, 2024

Chemours names Dignam permanent CEO

Energy & Chemical Value Chain

The Chemours Co. today named interim CEO Denise Dignam as the company’s permanent CEO and president, as well as a member of the board of directors, effective immediately. Dignam has been interim CEO since late February, when former CEO Mark Newman was placed on leave due to an internal investigation.

March 24, 2024

Neste merges three business lines into new Renewable Products unit

Energy & Chemical Value Chain

Neste Corp. (Espoo, Finland) has completed its organizational change process, announced on 1 November 2023. Neste informed that it will merge its three renewable business units into one Renewable Products business unit as well as restructure its functions to better support business-driven ways of working.

How can we help you?

We're easy to reach