Braskem closes on deal for Dow polypropylene unit
Dow Chemical said on Friday that it closed on the $340 million sale of its global polypropylene (PP) business to Brazil-based Braskem.
In addition to the transaction, which was first announced in July, the two companies said they would continue to evaluate potential future collaborations.
“The global polypropylene divestiture is another major step in Dow’s transformation and a strong example of our disciplined approach to portfolio and business prioritization,” said Andrew Liveris, Dow CEO.
“This divestment is in line with our strategy to transform our performance plastics business to focus on downstream, technology-differentiated solutions,” he added. “It also allows us to both reduce debt and liberate capital and resources for Dow’s higher growth, higher margin businesses.”
Dow’s polypropylene licensing and catalyst business and related catalyst facilities were excluded from the scope of the transaction.
The assets involved in the deal include two manufacturing plants in the US and two in Germany, with a total polypropylene production capacity of 1.05 million tpy.
The two US manufacturing plants located in Freeport and Seadrift, Texas, will be fully integrated into Braskem America, Inc., company officials said.
The two German plants located in Wesseling and Schkopau will operate under Braskem Europe GmbH.
The deal will deliver approximately $140 million in synergies through a more diversified portfolio, leveraged fixed cost base and working capital, logistics and supply optimization.
This acquisition brings a strong team that, combined with a worldwide polypropylene production capacity of 4 million tpy, positions Braskem to provide a broader portfolio of products and services to its customers, the company said.
"Braskem has a long term commitment to the polymers industry. We see enormous potential for growth and innovation in thermoplastics resins because of the endless uses in people's everyday lives," said Luiz de Mendonca, Braskem's executive vice president of international business.
"We are very excited to grow our partnership with our clients in North America and Europe,” he added.
Mark Nikolich, formerly vice president of commercial and supply chain for Braskem America, has been named CEO and general manager of Braskem Europe GmbH. Mr. Nikolich brings to this role over 20 years of experience in polyolefins and chemicals, the company said.
Meanwhile, Robert Nadin, formerly vice president of innovation and technology for Braskem America, has been appointed vice president of commercial and supply chain for polypropylene in North America.
Mr. Nadin has more than 25 years of industry experience in a variety of positions in research and development, business management, business development, and technology licensing, according to Braskem officials.
The sale makes Braskem the top polypropylene producer in North America on a capacity basis.
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