The Dow Chemical Company and Petrochemical Industries Company (PIC), a wholly owned subsidiary of Kuwait Petroleum Corporation (KPC), have officially inked the joint venture formation agreement and other key definitive agreements regarding the formation of K-Dow Petrochemicals. As per the company release, K-Dow, the 50:50 JV between two companies will set operations underway from January 1, 2009. The new company will be a leading global supplier of essential petrochemicals and plastics and will manufacture and market polyethylene, ethyleneamines, ethanolamines, polypropylene and polycarbonate, and will also license polypropylene technology and market related catalysts.
The total enterprise value of the Dow businesses going into K-Dow is approximately US$17.4 bln, equating to US$8.72 bln for each shareholder. Dow and PIC will move two of their existing 50:50 joint ventures, MEGlobal (a world leader in ethylene glycol) and Equipolymers (a supplier of PET resins) into K-Dow. The total revenue of K-Dow will be US$15 bln. The new venture is expected to 'diversify' Kuwait's national economy and place the nation as a key player world business stage. KPC's subsidiary, PIC, is likely to be a leading player in petrochemicals while maximizing business of its oil refining and basic petrochemicals.