Dow Chemical: More Restructuring to Come?

Just two years after a massive reorganization, Dow says it may sell one struggling unit and exit two joint ventures.
Katie Kuehner-HebertOctober 22, 2015

Dow Chemical on Thursday revealed it is considering additional restructuring actions, including the sale of its struggling farm chemicals and seeds unit and the winnowing or outright sale of its stakes in two Kuwaiti joint ventures, although Dow might buy Corning’s stake in a silicon JV.

“Dow embarked on a massive restructuring in 2013, shrinking its low-margin commodity chemical businesses, including its century-old chlorine unit, to focus on more lucrative specialty chemicals used in electronics and packaging,” Reuters wrote.

Consolidation among farm-focused companies has been triggered by falling crop prices and rising fertilizer output. “Everyone is talking to everyone,” Dow chief executive Andrew Liveris said on a conference call.

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SunTrust Robinson Humphrey analyst James Sheehan told Reuters that Dow’s best options may be to merge its agricultural unit with Monsanto or Dupont, or to sell it altogether.

The company’s operating profit rose 14% to 82 cents per share in the third quarter, beating the average analyst estimate of 69 cents, as raw material costs fell.

Revenue fell 16%, to $12.04 billion, missing analysts’ expectations of $12.38 billion, according to Thomson Reuters I/B/E/S.


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