#USA #Dow Chemical #Midland, Michigan #DowAksa #Aksa Akrilik

Dow Chemical Sells Its 50% Stake in DowAksa Joint Venture

In a significant business move, Dow Chemical Company (NYSE: DOW) has signed a sale and purchase agreement to divest its 50% stake in DowAksa Advanced Composites Holdings BV to its joint venture partner, Aksa Akrilik Kimya Sanayii A.Ş. This strategic decision is aimed at streamlining Dow’s operations and enhancing its focus on core areas of growth.

Background of the Transaction

The joint venture, DowAksa, was established in 2012 between Dow and Aksa Akrilik, a company part of the larger Akkök Holding group. This collaboration was intended to leverage both companies' respective strengths in advanced composite materials. However, with a shift in focus towards core, high-value downstream businesses, Dow has opted to exit the agreement. The sale proceeds, estimated at $125 million, will not only reflect the financial health of the deal but also support Dow's broader goals of capital allocation.

The transaction, which is expected to close in the third quarter of 2025, is contingent upon customary regulatory approvals. It reportedly carries an enterprise value approximating 10 times the predicted operating earnings before interest, taxes, depreciation, and amortization (EBITDA) for 2025.

Implications for Dow

This divestiture aligns with Dow's best-owner mindset strategy, focusing on opportunities that drive profitable growth. By selling its stake in DowAksa, Dow aims to concentrate resources on its most promising business sectors, which include packaging, infrastructure, mobility, and consumer applications. The materials science leader, with manufacturing operations across 30 countries and a workforce of about 36,000 employees, is committed to sustainable practices and innovation.

The financial advisory role for this transaction was undertaken exclusively by BNP Paribas, ensuring that Dow received strategic guidance throughout the sale process, optimizing the conditions under which the deal could be completed.

Future Outlook

Looking ahead, Dow intends to leverage the capital raised from this sale to further solidify its financial position and invest in initiatives that will bolster its sustainability objectives. The company has a strong footing in various high-growth markets, which could benefit immensely from the capital influx.

Through this strategic exit, Dow demonstrates its commitment to evolving business models that prioritize core capabilities over supplementary interests, allowing for enhanced focus on value-driven operations. Such decisions are essential for navigating the increasingly competitive landscape of materials science, where agility and strategic investments can dictate market leadership.

As Dow continues to refine its portfolio, customers and stakeholders alike can expect a shift towards innovative, sustainable products, driven by a forward-thinking approach to materials development. This sale marks another step in what promises to be a transformative year for the company as it adapts to market demands and positions itself for future success.

For more information about Dow and its commitment to sustainability, visit www.dow.com.