Midland, Michigan - Dow Chemical Company and Petrochemical Industries Co. (PIC), a wholly owned subsidiary of Kuwait Petroleum Corp. (KPC), have signed a 50:50 joint venture formation agreement to form K-Dow Petrochemicals.
K-Dow will be a global supplier of petrochemicals and plastics and will manufacture and market polyethylene, ethylenamines, ethanolamines, polypropylene and polycarbonate, Dow said 1 Dec.
Dow is contributing a total enterprise value of $17400 million into K-Dow whilst PIC is contributing around $7500 million. Dow expects to receive $9000 million in pre-tax proceeds relating to the transaction.
"The formation of K-Dow Petrochemicals will be a critical milestone in Dow's transformation into an earnings growth company," said Dow ceo, Andrew Liveris. "This is a giant step in our strategy of growing our Basics business through joint ventures, reducing our capital intensity, freeing up $9000 million in pre-tax cash profits to invest in our performance businesses. We have effectively set the stage for our next major landmark - completing the proposed acquisition of Rohm and Haas in early 2009," he added.