Dow Chemical sells MEGlobal to Kuwait’s Equate

Dow Chemical has finalized the transaction to sell its ownership interest in MEGlobal to EQUATE Petrochemical Co. and has received $1.5 billion in pre-tax proceeds, the company announced on Thursday.

Dow had previously announced its intent to optimize its ownership in its Kuwaiti JVs, and the closure of this transaction represents progress toward delivering this commitment.

“This is a significant step in our Kuwaiti JV consolidation activities and demonstrates Dow’s drive to review our entire joint venture portfolio with a best-owner mindset, with the objective of delivering maximum value to our shareholders,” said Andrew N. Liveris, Dow’s CEO. “This transaction enables Dow to maintain our commitment to these long-standing joint ventures, while returning value to our owners.”

MEGlobal is a world leader in the manufacture and marketing of monoethylene glycol and diethylene glycol (EG), and is headquartered in Dubai, UAE. Established in July 2004, MEGlobal currently markets over 2.5 MMtpy of EG. EG is used as a raw material in the manufacture of polyester fibers (clothing and other textiles), polyethylene terephthalate (PET) resins, antifreeze formulations and other industrial products.

MEGlobal is a joint venture between Dow and Petrochemical Industries Co.(PIC) of Kuwait. Through its ownership interest in EQUATE, Dow retains a 42.5% ownership stake in MEGlobal.

Established in 1995, EQUATE is the operator of an integrated world-scale manufacturing facility producing more than 5 million tons annually of high-quality petrochemical products, including polyethylene, ethylene, and EG, that are marketed throughout the Middle East, Asia, Africa and Europe.

HSBC Securities (USA) Inc. served as financial advisor to Dow for the transaction. Shearman & Sterling LLP served as Dow’s legal counsel.