Dow Chemical Company, the world's second-largest manufacturer of chemicals, plastics and agricultural products yesterday entered into a deal with private equity firm Bain Capital to sell its specialised plastics unit Styron for $1.63 billion.
Under the terms, Dow holds an option to receive up to 15 per cent of the equity in Styron as part of the sale consideration, apart from several long-term supply and purchase agreements, which will generate substantial value for both Dow and Styron.
Styron operates over 40 manufacturing plants worldwide and employs around 1,900 people. The division's 2009 revenue was approximately $3.5 billion.
Dowis a leading supplier of styrenic plastics, synthetic rubber and latex. Its plastic products are widely used in optical media, electrical and lighting, packaging, appliances, consumer electronics, automotive and building and construction.
Styron's synthetic rubber is used in a range of products including tires, hoses, conveyor belts, footwear, high performance elastomers while latex products find their applications in paper / paperboard and flooring.
The transaction is expected to close by August 2010, subject to customary conditions and regulatory approvals.