Dow advances strategic focus with sale of flexible packaging laminating adhesives business to Arkema

Rhea-AI Summary

Dow announced the sale of its flexible packaging laminating adhesives business to Arkema, aligning with its strategy to focus on core businesses. The proceeds will support growth strategies and create long-term shareholder value.

Positive

• Focus on core, high-value downstream businesses

• Proceeds to support growth strategies and shareholder value

Negative

• None.

Insights

Financial Analyst

The sale of Dow's flexible packaging laminating adhesives business to Arkema represents a strategic portfolio realignment, emphasizing Dow's commitment to its core, higher-value downstream markets. By divesting non-core assets, Dow is poised to streamline operations, potentially improving its operating margins. The capital raised from this sale is earmarked for the company's Decarbonize & Grow and Transform the Waste initiatives, which are intrinsic to Dow's strategic shift towards sustainability and long-term profitability. This transaction underlines a broader trend in the chemical industry where companies are reshuffling their portfolios to focus on sustainable growth areas that align with global trends of decarbonization.

Sustainability Expert

Dow's decision to sell its flexible packaging laminating adhesives business advances its sustainability targets by aligning with its Decarbonize & Grow strategy. The sale is indicative of Dow's commitment to reshaping its business to reduce its carbon footprint. The infusion of funds from the sale into Dow's initiatives to transform waste and decrease carbon emissions may position the company favorably in the eyes of environmentally-conscious investors and can confer a competitive edge as regulations tighten around environmental impact. The broader implication is that Dow is actively joining the ranks of corporations anticipating the shift towards a green economy and, as such, is investing to harness opportunities within that space – which could yield significant earnings growth by 2030.

• Proposed transaction aligns with the Company's best-owner mindset
• Proceeds to support the Company's Decarbonize & Grow and Transform the Waste strategies

MIDLAND, Mich., May 2, 2024 /PRNewswire/ -- Dow (NYSE: DOW) announced today that it has signed an agreement to sell its flexible packaging laminating adhesives business, within Dow's Packaging & Specialty Plastics segment, to Arkema, a leader in specialty materials.

This transaction enables the Company to further increase its focus on core, high-value downstream businesses. The proceeds of this transaction will support Dow's capital allocation priorities, including accelerating our growth strategies and delivering long-term shareholder value.

"In line with Dow's best-owner mindset, we are focused on proactively managing our asset portfolio to invest in businesses with competitive positions in attractive markets," said Jim Fitterling, Dow chair and CEO. "Proceeds will help us advance our long-term Decarbonize & Grow and Transform the Waste strategies designed to capture more than $3 billion in annual earnings growth by 2030."

About the Transaction
Five manufacturing sites in Italy, the United States and Mexico will transfer to Arkema and include Solvent-Based Laminating Adhesives, Solventless Laminating Adhesives, and Heat Seal Coatings product families.

The transaction value is $150 million or approximately 10 times forecasted 2024 EBITDA. The transaction is expected to close by the end of 2024, subject to regulatory approval.

Dow will retain its water-based laminating adhesives and acrylic adhesives businesses in Packaging and Specialty Plastics, as well as adhesive solutions in Dow Consumer Solutions and MobilityScience™, which align with the Company's market growth strategies.

Dow and Arkema are committed to delivering a seamless transition for all stakeholders.

About Dow
Dow (NYSE: DOW) is one of the world's leading materials science companies, serving customers in high-growth markets such as packaging, infrastructure, mobility and consumer applications. Our global breadth, asset integration and scale, focused innovation, leading business positions and commitment to sustainability enable us to achieve profitable growth and help deliver a sustainable future. We operate manufacturing sites in 31 countries and employ approximately 35,900 people. Dow delivered sales of approximately $45 billion in 2023. References to Dow or the Company mean Dow Inc. and its subsidiaries. Learn more about us and our ambition to be the most innovative, customer-centric, inclusive and sustainable materials science company in the world by visiting www.dow.com.

For further information, please contact:

Mary Fournier
+1 989-636-7475
mkfournier@dow.com 

X: https://twitter.com/DowNewsroom
Facebook: https://www.facebook.com/dow/ 
LinkedIn: http://www.linkedin.com/company/dow-chemical 
Instagram: http://instagram.com/dow_official 

 

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SOURCE The Dow Chemical Company

FAQ

What business did Dow sell to Arkema?

Dow sold its flexible packaging laminating adhesives business to Arkema.

What is Dow's stock symbol?

Dow's stock symbol is DOW.

Who is the CEO of Dow?

Jim Fitterling is the CEO of Dow.

What are Dow's capital allocation priorities?

Dow's capital allocation priorities include accelerating growth strategies and delivering long-term shareholder value.

What are Dow's long-term strategies?

Dow's long-term strategies include Decarbonize & Grow and Transform the Waste, aiming to capture over $3 billion in annual earnings growth by 2030.