In addition to these separation actions, the company also announced that it will shut down approximately 800,000 tons of chlorine and caustic equivalent capacity in Freeport, Texas. The capacity being shut down will be replaced with supply from new facilities that will come online with the start-up of the Dow Mitsui joint venture in early 2014. The shutdowns will help maintain Dow's balances and will be coordinated with the start-up of the joint venture.
Dow's Executive Vice President Jim Fitterling will oversee the separation and transaction activities.
"Due to the highly integrated nature of the chlorine value chain, we are conscious not to leave any stranded costs or create negative synergies," said Fitterling. "Further, we anticipate that any related transaction or transactions will include supply and purchase agreements between these units and the Company to support downstream products aligned with Dow’s strategic market focus."
In the past 12 months, Dow has completed or announced transactions totaling $700 million, including the recently announced definitive agreement to divest its global Polypropylene Licensing & Catalysts business. In anticipation of this separation, the Company announced in October it had expanded its divestiture target to $3 billion - $4 billion in proceeds over the coming 18 to 24 months. In line with the Company’s stated commitments, Dow expects to direct proceeds of these transactions toward increasing shareholder remuneration, organic growth investments and additional interest expense reductions.