Union Carbide completes divestiture in Optimal Group to Petronas

05-Oct-09

Union Carbide, a wholly owned subsidiary of Dow, has completed the divestiture of its ownership in the Optimal Group to Petronas for an equity value of US$660 mln. The proceeds from this transaction will be used for further debt reduction, in-line with the company's de-leveraging plan. In July, The Dow Chemical Company and Petroliam Nasional Berhad (PETRONAS) reached an agreement for Dow's Union Carbide Corporation subsidiary to sell its entire shares of ownership in the OPTIMAL Group of Companies (OPTIMAL) to PETRONAS for US$660 million. PETRONAS would fund this acquisition through internally generated funds. The transaction, subject to customary conditions and approvals, is expected to close by the end of the third quarter of 2009. Dow and PETRONAS agreed to enter into a commercial supply agreement allowing the two companies to continue serving the current customer base with products manufactured by OPTIMAL. Dow will market OPTIMAL's basic and performance chemicals products to Dow's existing customer base in Asia Pacific. The change in ownership is not expected to have any immediate effect on employment in the region. OPTIMAL's focus continues to be operating safely, responsibly and effectively while providing world-class products for customers throughout Asia. The divestiture of OPTIMAL follows other actions designed to increase Dow's financial flexibility, improve its cash flow, and pay down its bridge loan. As a result of these actions, the Company is ahead of all of its financial milestones, including the paydown of the bridge loan utilized to acquire Rohm and Haas. These include: " Announced the $1.7 billon sale of Morton Salt, a transaction expected to close in the second half of 2009 " Sold the Company's Calcium Chloride business to Occidental Petroleum for a value in excess of $210 million " Announced a definitive agreement for the sale of interests in Total Raffinaderij Nederland N.V. (TRN) for an enterprise value expected to be approximately $725 million, also expected to close in the second half of 2009 " Issued $6 billion of new long-term debt " Issued $2.25 billion of new equity " Eliminated $3 billion of perpetual preferred securities from the capital structure.