After speaking with people familiar with Dow’s direction, it appears an outright sale of Dow Ag is becoming more remote by the day. What is more often being discussed is a partial sale into a JV or a partial IPO. Either of these scenario’s would be acceptable and in all reality, were Dow to IPO part of it and give existing shareholders first crack at pre-IPO pricing, that would be something I would be very interested in.
In press release lingo, “increased flexibility” translates to “we do not have to dump this asset if we don’t get 100% of what we want”. I’m starting to calm down over this whole thing now…
From the Release:
The Dow Chemical Company (NYSE: DOW) announced today that it has signed two separate sale agreements totaling in excess of $900 million as part of its de-leveraging plan designed to pay down debt, preserve financial flexibility, streamline its portfolio and improve cash flow. Sales of non-strategic assets announced so far this year now total in excess of $2.6 billion, well ahead of the Company’s original divestment plan.
The Company announced that it has signed an agreement to sell its Calcium Chloride business to a strategic chemical industry buyer for a value in excess of $210 million. At the closing of the transaction, employees of the Calcium Chloride business will transition to the buyer’s business. In addition, the Company announced a definitive agreement for the sale by Dow Europe GbmH and Dow Benelux BV of their interests in Total Raffinaderij Nederland N.V. (TRN), Dow’s joint venture with Total S.A., to Valero Energy Corporation (NYSE: VLO) for an enterprise value expected to be approximately $725 million.
“These asset sales at valuations that result in significant de-leveraging represent another major step in the acceleration of Dow’s divestiture and de-levering plans despite a challenging economic environment,” said Andrew N. Liveris, Chairman and CEO of Dow. “We are delivering on our commitments ahead of schedule and creating the momentum needed to strengthen our financial position and create a faster path to earnings growth.”
The transaction for the Calcium Chloride business will include the calcium chloride assets associated with Dow’s Ludington, Michigan operations; Dow-owned calcium chloride terminals; and the nationally-known brands PELADOW™ premium ice-melt, LIQUIDOW™ calcium chloride solution, COMBOTHERM™ blended deicer, BRINER’S CHOICE™ calcium chloride, and DOWFLAKE™ Xtra calcium chloride flake. The transaction is subject to customary closing conditions, including regulatory approvals, and is expected to close by the end of June 2009.
Disclosure (“none” means no position):Long Dow