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Dow takes plastics additives unit off selling block

By: PLASTICS & RUBBER WEEKLY

September 18, 2013

Dow Chemical Co. has taken its plastics additives business off the market, apparently because it did not get sufficiently high bids for the division.

The Midland, Mich.-based chemical giant had signaled the additives operation was for sale, along with its polypropylene licensing and catalysts business unit, back in March.

At the time Chairman and CEO Andrew Liveris described the decision to sell the business units as a "proof point of Dow's rigorous focus on return on capital, and…squarely in line with commitments we made earlier this year."

However in a presentation arranged by Credit Suisse on Sept. 17, Liveris said the company was "quite comfortable" running the additives operation for cash.

According to a transcript of the meeting, Liveris said: "This is a valuable business that is currently being undervalued by buyers in the market. As a result, we are pulling the transaction off the table and we are quite comfortable with running this business for the next several years."

Liveris declined to reveal what offers had been made for the additives division, although Bloomberg said analysts estimated it was worth around $520 million.

The business generated annual revenues of around $680 million and $80 million in earnings before interest, tax, depreciation and amortization.