Kuwait’s PIC buys half share in Dow’s polyolefins and PC
Dow Chemical is to place its polyethylene, polypropylene and polycarbonate businesses in a joint venture with Kuwait’s Petrochemical Industries (PIC) in an $11bn (EURO 7.5bn) turnover joint venture.
The new 50:50 owned business, to be headquartered in the US, will have over 5000 employees worldwide. And it will combine Kuwait’s feedstock resources as a top ten energy/hydrocarbon company with Dow’s technology and market position, including its top position in polyethylene.
PIC will pay Dow $9.5bn (EURO 6.5bn) for its share in the business assets in the new venture which is intended to be in place by the latter part of next year. Other products included in the deal are ethyleneamines, ethanolamines.
The two companies are already linked in the MEGlobal ethylene glycol joint venture that was established in 2004.
Dow chairman and chief executive officer, Andrew Liveris, said: “For Dow, this marks an important milestone in our transformational strategy growing our basic businesses through joint ventures; reducing our capital intensity; and freeing up cash to invest in our portfolio of performance and market facing businesses.”
At PIC parent Kuwait Petroleum Company, chief executive officer Saad Al-Shuwaib said: “The joint venture will enable PIC to expand and diversify its international petrochemical presence while building on our long standing relationship with Dow.”
Senior Dow executives indicated at K2007 that joint ventures were being sought for a number of businesses under what the group calls an “asset light” strategy.