Dow Chemical Eyes Options for Commodity Chemicals

Dow Chemical Co. (DOW) said it is exploring a possible sale or spinoff of its commodity chemicals businesses, in a continuation of the chemical company's push to refocus its efforts.

The assets include about 40 manufacturing facilities at 11 sites and nearly 2,000 employees, accounting for up to $5 billion in annual revenue.

"These businesses have served us well over decades, but are serving markets that Dow has exited over time," said Chief Executive Andrew N. Liveris.

Dow has retained financial advisers to explore all separation alternatives for the businesses, including joint ventures, spinoffs and divestitures, and expects to execute transactions within the next 12 to 24 months. The transactions can be in pieces or on the whole of the established scope, the company said.

Dow said earlier this year it wanted to raise $1.5 billion over a span of 18 months by shedding noncore businesses, and it has cut jobs and shut plants in an effort to trim expenses.

In October, Mr. Liveris said the company is moving forward with its divestiture plans, saying the actions were valued at a minimum of $3 billion to $4 billion. Dow recently agreed to sell its polypropylene licensing and catalysts business to fellow chemicals company W.R. Grace & CO. (GRA) for $500 million.

Dow plans to carve out a significant portion of its chlorine value chain facilities and businesses, including its U.S. Gulf Coast Chlor-Alkali and Chlor-Vinyl facilities in Plaquemine, La., and Freeport, Texas.

In addition to the separation plans, the company said it will shut down about 800,000 tons of chlorine and caustic equivalent capacity in Freeport. The capacity being shut down will be replaced with supply from new facilities that will come online with the startup of the Dow Mitsui joint venture in early 2014.

Shares closed Friday at $39.06 and were inactive premarket. The stock is up 21% so far this year.

Write to Ben Fox Rubin at [e-mail]

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