The Dow Chemical Company announced that it has signed a definitive agreement under which Dow's global Polypropylene Licensing & Catalysts business will be divested to W. R. Grace & Co. for a sale price of $500 million. Dow expects to report a gain on this divestment and net proceeds will be directed toward the Company's main priorities of remunerating shareholders, debt reduction and funding growth. The transaction is expected to close by the end of 2013, pending regulatory clearance.
Dow had previously announced its intent to divest this business on March 14, 2013, as part of the Company’s ongoing commitment to proactive portfolio management and plan to divest nearly $1.5 billion in assets by mid to late 2014.
"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 optimizing their value," said Andrew N. Liveris, Dow's chairman and chief executive officer. "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."
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 transition employment status to W. R Grace & Co. as part of the transaction. Under terms of the purchase agreement, W. R. Grace & Co. will honor customer, licensing and supplier contracts and related agreements. Both companies are committed to working together for a seamless transition for all stakeholders.