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Dow To Exit Styrenics

Sale of Styron division to Bain Capital for $1.6 billion further focuses portfolio

by Alexander H. Tullo
March 8, 2010 | A version of this story appeared in Volume 88, Issue 10

Dow Chemical has agreed to sell its Styron division to the private equity firm Bain Capital for $1.6 billion.

Dow formed Styron last summer as a means of carving out polymer businesses that no longer fit its specialty chemical strategy. Styron generated $3.5 billion in revenues last year.

The business includes styrene derivatives such as acrylonitrile-butadiene-styrene and expandable polystyrene. It also houses Dow’s polycarbonate, latex, and synthetic rubber operations, as well as production of some specialty polymers. Dow’s 50% stake in Americas Styrenics, a polystyrene joint venture with Chevron Phillips Chemical, is included as well.

“We are committed to further focusing our portfolio by shedding nonstrategic assets that can no longer compete for growth resources inside the company,” says Dow CEO Andrew N. Liveris. Dow has sold a number of businesses since its acquisition of Rohm and Haas last April, including Rohm and Haas’s powder coatings and Morton Salt units as well as its own calcium chloride and acrylic monomers and polymers businesses. Additionally, Dow is in talks to form a joint venture for its polyethylene businesses.

This isn’t Bain’s first foray into chemicals. Earlier it acquired Rhodia’s phosphate business and took it public, purchased coatings maker SigmaKalon and sold it to PPG Industries, and took over the German chemical distributor Brenntag before selling it to another private equity firm.

Paul Mann, a chemical stock analyst with Morgan Stanley, says the price Bain is paying for Styron exceeds his expectation of up to $1.2 billion.


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