Dow Completes Sale of Styron Business
19:25 PM | June 17, 2010 | Lindsey Bewley
Dow Chemical says it has completed the sale of its styrenics unit, Styron, to Bain Capital (Boston) for $1.63 billion. The company placed Styron up for sale in July 2009 and announced in March that it would sell to Bain. The deal includes Dow’s styrene-butadiene latex, styrene-butadiene rubber, polycarbonate, acrylonitrile butadiene styrene/styrene acrylonitrile resins, expandable polystyrene, polystyrene and styrene monomer units. Also included in the deal are several long-term supply, service and purchase agreements valued at about $400 million, sources say. Dow will supply Styron the materials needed to produce its plastics, sources say.
The sale is part of the company’s continuing efforts to mend its balance sheet following its $16.3-billion purchase of specialty chemicals maker Rohm and Haas last year. The sale also helps Dow move away from commodity chemicals and heightens the company’s concentration in the higher-margin specialty chemical sector. The Styron business comprised 35% of Dow’s basic chemicals division.
Dow has elected to retain a 7.5% equity position in Styron, which will operate as a stand-alone company. Former Nova Chemicals CEO Chris Pappas has been appointed president and CEO of Styron. Pappas will succeed Mark Remmert, who has served as CEO of Styron since last July.
Bain Capital’s previous chemical sector investments include Brenntag, Innophos, SigmaKalon, Feixiang Chemicals, and Himadri Chemicals.