Arab nations to buy out Dow Chemical

  1. Arab nations to buy out Dow Chemical

    Now.. where are the voices that were against the port deal.

    LONDON (Reuters) - A consortium of Middle Eastern investors and American buyout firms is preparing a $50 billion approach for Dow Chemical Co. (DOW.N: Quote, Profile , Research) in what could be the world's biggest ever leveraged buyout, a paper said on Sunday.

    Quoting sources close to the deal, The Sunday Express, a UK tabloid paper, said a financing package has been put in place for a break-up bid of between $52 to $58 a share and an approach valuing the company at least $50 billion could come by the end of this week.

    Dow's shares closed up 35 cents at $44.47 on the New York Stock Exchange on Thursday.

    At least half of the capital is being provided by investors from Saudi Arabia, Kuwait, Bahrain, Qatar, UAE and Oman, with the rest contributed by a number of U.S. buyout firms including Kohlberg Kravis Roberts (KKR.UL: Quote, Profile , Research), it said.

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    Representatives of Dow Chemical and Kohlberg Kravis Roberts were not immediately available for comment.

    The story follows reports in recent months that strategic changes were afoot at Dow, which has been moving toward a focus on specialty chemicals.

    In March the Wall Street Journal said Dow was in talks with India's Reliance Industries Ltd. (RELI.BO: Quote, Profile , Research) about a potential joint venture, citing people familiar with the matter.

    Analysts had said they were unsurprised at the report and expected Dow to split off its basic chemicals and plastics business as part of what it has called its "asset light" strategy, which would give it a more nimble and higher-margin profile focusing on specialty chemicals.

    In late February the Sunday Express reported that Dow could get a takeover offer of as much as $54 billion from buyout funds, without naming any sources.

    The paper had said the approach was likely to come from a combination of global investors and American private equity giants, who intended to break up the group into smaller companies through a highly leveraged buyout.

    (Additional reporting by Sinead Carew in New York)

  2. well that sucks!!!!

  3. They have a plant down the Mississippi from me that we take some chemicals from.

    This sounds like basically a plan to get rid of their more commodity based petrochemicals from the steam cracker.

    Not sure how the sites Dow has will be divided up. They are fairly integrated. It isn't clear cut how you manage a site where the Saudi's (or whomever) own the upsteam plants (steam cracker) and you (Dow) own the downstream specialties plant.
    Anyway - this puts Dow in line to better compete with DuPont.

    The chemical arms of the oil companies are KILLING Dow right now. I think they know the writing is on the wall - you can't make sh*t for money with a steam cracker if you aren't connected to a refinery.
    Fact of life.

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