Dow to sell polypropylene licensing, catalyst business to W R Grace for $500 mn
11 Oct 2013
US chemical giant Dow Chemical Co today said it will sell its polypropylene licensing and catalyst business to its smaller rival W R Grace & Co for $500 million.
Dow expects to report a gain on this divestment and said that net proceeds from the sale will be used to pay shareholders, debt reduction and funding growth.
The transaction is expected to close by the end of 2013, pending regulatory clearance.
The Michigan-based company had earlier in March announced its intent to divest this business as part of its ongoing commitment to proactive portfolio management and planned to divest nearly $1.5 billion in assets by mid to late 2014.
Dow has already divested non-core businesses worth about $8 billion in revenue since 2009.
The divestiture includes Dow's polypropylene catalysts manufacturing facility at Norco, Louisiana, and customer contracts, licenses, intellectual property and inventory.
Approximately 90 employees globally are expected to be shifted to W R Grace & Co, as part of the deal.
Under terms of the agreement, Grace will honour customer, licensing and supplier contracts and related agreements entered into by Dow.
''Today's announcement is another clear demonstration of Dow's rigorous focus on selectively shifting our portfolio away from assets that are no longer a strategic fit and optimising their value,'' said Andrew Liveris, Dow's chairman and CEO.
''Our accelerated strategy is focused on narrowing our market participation and preferentially funding our select growth businesses with strong competitive positions in attractive markets such as electronics, water, packaging and agricultural sciences. We are planning further proactive divestments in the next 12 months in our relentless pursuit of rewarding shareholders,'' he added.
''The addition of Dow's world-class polypropylene products and process technology is a significant enhancement of Grace's market-leading catalysts franchise,'' said Grace chairman and CEO, Fred Festa. ''This acquisition strengthens our ability to provide polypropylene catalyst solutions to our customers around the world.''
Maryland-based Grace is a leading supplier of polyolefin catalyst technology and has the broadest portfolio of polyolefin catalyst technologies.
Grace is a leading global supplier of catalysts; engineered and packaging materials; and, specialty construction chemicals and building materials.
It employs approximately 6,500 people in over 40 countries and had 2012 net sales of $3.2 billion.
