Styron Begins Operations as a Leading Materials Company with Global Reach
Jan 11, 2010 Reuters
Dow's Styron unit
attracts private equity-sources
* Bidders for Styron asked to reconfirm interest Monday
* A number of private equity firms interested
* Dow says on pace to sell the unit in first quarter
Bidders for Dow Chemical Co's Styron unit have been asked to reconfirm their interest on Monday in order to narrow the field of buyers, sources familiar with the matter said.
Dow, the No. 1 U.S. chemicals company, put Styron up for sale in July and said at the time the unit could fetch $1 billion to $2 billion. It hopes to sell the unit, which makes polystyrene, rubber and latex, by the first quarter of 2010.
Styron has mostly drawn interest from private equity firms, including Bain Capital, TPG Capital LP, Apollo Management LP and investment firm Rhone, among others, the sources said.
There is also some strategic interest -- meaning from bidders in the same sector, rather than private equity firms.
Dow spokesman Bob Plishka told Reuters on Friday that Dow was still on pace to sell the business in the first quarter and acknowledged there was some strategic interest.
The company declined further comment on the sale.
"We are in discussions, both with financial as well as with strategic partners -- potential partners," Geoffery Merszei, executive vice president at Dow, said according to a transcript of a November conference call. "And I think we will be able to announce more on where we stand on the Styron divestiture by the next quarterly earnings announcement."
Dow's next earnings announcement is scheduled for February 2, according to its website.
Sources characterized Monday's deadline as narrowing the field of bidders before setting a deadline for second round bids.
Extracting the business from Dow could be a difficult process for a buyer, sources said, because Styron has numerous contracts with the unit as both a supplier and a customer.
Renegotiating these contracts will be a substantial and lengthy part of the process, and is one reason why the firm is looking to reduce the number of bidders.
Rhone, which has offices in London, Paris and New York, was one of the firms that bought Alcoa's specialty chemicals unit in 2004. Apollo has invested in Berry Plastics and specialty chemicals firm Hexion; while Bain has invested in chemicals companies including Brenntag and Innophos Holdings.
Deutsche Bank and HSBC are advising Dow on the sale.
January 12, 2010 PLASTICS NEWS
Korea's Lotte considering
bid for Dow's Styron business
Lotte Co. Ltd., a South Korean conglomerate, is considering buying Dow Chemical Co.’s styrenics and polycarbonate business, according to a Dow Jones report.
Back in July, Midland, Mich.-based Dow had announced plans to try to sell the business, which it dubbed Styron Corp.
Dow Jones reported that a Lotte spokesman said Jan. 7 that the company was considering buying a controlling stake in Styron. But he said the company had not made final decision.
Seoul-based Lotte got its start making candy, but today has operations in food, hotels, retail, financial services, chemicals, electronics, construction, publishing, and entertainment. Its chemical unit, Honam Petrochemical Corp. in Seoul, makes high density polyethylene, polypropylene and mono ethylene glycol.
According to Dow Jones, a potential deal would be valued at between $1 billion and $2 billion.
Bain, TPG, Apollo, Rhone, Deutsche and HSBC declined comment.
2009/7/30 ICIS news
US Dow prepares styrenics, aromatics units for sale
Dow plans styrenics, aromatics sale
Dow Chemical plans to spin off its styrenics and aromatics businesses into a new company called Styron as part of an effort to make them better suited for sale, the US major said on Thursday.
In a conference call with analysts, CEO Andrew Liveris said Styron would be valued at $1bn-2bn (?710m-1.42bn) and would be comprised of the company’s polycarbonate (PC), acrylonitrile butadiene styrene (ABS)/styrene acrylonitrile (SAN) resins, polystyrene (PS) and styrene monomer operations.The company will have its own chief executive and chief financial officers and will operate with about 1,500 employees and 40 locations worldwide.
“Carving these businesses out as separate should make them more attractive to potential acquirers,” Liveris said. “We intend to form a subsidiary at some point in the near future.”
The business will initially be a part of Dow, but should transition to a different ownership structure in the future, the US major said.
“We believe we have better businesses in our new portfolio,” Liveris said. “[Styron] can grow in the emerging world, with a new ownership structure that can better focus on feeding that growth. It’s quite possible we could partner where we’re a minority owner.”
Dow spokesman David Winder said the company’s stake in the Americas Styrenics joint venture with Chevron Phillips Chemical would be transferred to Styron.
The creation and potential sale of Styron is part of Dow’s plan to raise $23bn-26bn in asset sales to pay down debt related to the company’s acquisition of Rohm and Haas.
Dow said it was on track to divest at least $4bn of that by the end of 2009, with agreements for $3.3bn in divestments already in place.
Shares of Dow, which beat analyst predictions for its second-quarter earnings, closed at $21.53 on the New York Stock Exchange, up 6.2%.
2010/10/4 PLASTICS NEWS
Dow sells stake in PC venture to LG Chem
South Korean plastics and chemicals giant LG Chem LTD. has bought out Dow Chemical Co.’s 50 percent stake in a polycarbonate-making joint venture for an undisclosed price.
Dow’s half of the LG Dow Polycarbonate Ltd. JV went over to Seoul-based LG on Oct. 1, according to an Oct. 4 Bloomberg News report. The JV operates a pair of plants in Yeosu, South Korea, with combined annual capacity of almost 375 million pounds of PC, according to the report.
The JV rang up sales of $325 million in 2009. It was founded in 1999 and began production in 2001, making PC under Dow’s Calibre trade name.
Dow’s share of the JV was set to transfer to private equity firm Bain Capital, which bought Dow’s Styron unit - including PC - for $1.6 billion earlier this year.
Dow’s LG Dow PC stake “was one of the real strong assets of the [Styron] deal” because of growth prospects in Asia for automotive and electronic PC usage according to industry analyst Roger Young of Robert Eller Associates in Akron, Ohio. The sale leaves Styron without an Asian manufacturing base, Young added. Styron also has PC production in Freeport, Texas, and Stade, Germany.
Officials with Midland, Mich.-based Dow could not be reached for comment.