Dow Chemical Halts Sale of Plastics Additives on Low Bids
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Dow Chemical Co. (DOW), the largest U.S. chemical producer by sales, no longer plans to sell its plastics-additives business because bidders didn’t offer enough.
Dow is “quite comfortable” continuing to run the additives business for cash, Chairman and Chief Executive Officer Andrew Liveris said today in a presentation at a conference organized by Credit Suisse Group AG.
“This is a valuable business that is currently being undervalued by buyers in the market,” Liveris said. “As a result, we’re pulling the transaction off the table.” He didn’t say how much was offered for the unit.
Dow, based in Midland, Michigan, continues to pursue the sale of other units as outlined earlier this year, Liveris said. The plastics-additives unit was part of $1.5 billion in proposed divestitures, along with a fumigants unit and polypropylene licensing and catalysts, announced in March.
Liveris in July also announced possible sales of slow growing, low-profit units with $6 billion in combined revenue. A divestiture or formation of a joint venture is “particularly” likely for the epoxy and chlorine derivatives units, Liveris said today.
Plastics additives, with about $680 million in annual sales and $80 million in earnings before interest, taxes, depreciation and amortization, is worth about $520 million, Hassan Ahmed, a New York-based analyst at Alembic Global Advisors, said in an Aug. 5 note.
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