US-based Dow Chemical has agreed to sell its polypropylene (PP) business for US$340 million to Braskem, catapulting Dow into number one PP maker position in North America. The assets involved in the deal include two manufacturing plants in USA and two in Germany, with a total annual polypropylene production capacity of 2.3 billion lb. The US plants are located at Freeport, Texas, and Seadrift, Texas, and will increase Braskem's polypropylene capacity by 50% in the region to an annual production capacity of 3.1 billion lbs. The German plants are located in Wesseling and Schkopau, and have an annual capacity of 1.2 bln lbs of polypropylene.
The deal comprises of US$323 mln in cash plus other cash and contingency assumptions of US$17 mln. The deal is scheduled to close by the third quarter, pending regulatory approvals. Last year, Braskem acquired the PP business of Sunoco Inc. - including plants in Pennsylvania, West Virginia and Texas - for US$350 mln in cash.