Dhahran, Saudi Arabia – Dow Chemical Co. and Saudi Aramco have signed a non-binding memorandum of understanding (MOU) for Dow to acquire an extra 15% stake in their Sadara joint venture.
The proposed deal would see Dow and Saudi Aramco would each hold a 50% equity stake in Sadara, noted a 28 Aug Aramco release. Financial terms were not disclosed.
The ‘equity equalization’, said Aramco, would follow: the intended separation of the Materials Science Company, within 18 months after the close of the merger between Dow and DuPont on 31 Aug; and Sadara’s completion of a ‘creditors reliability test
“Increasing our equity stake in this iconic joint venture is a powerful example of our strategic partnership with Saudi Aramco,” said Andrew Liveris, Dow’s chairman and CEO.
The move, Liveris added, “is yet another accelerator in Dow’s long-term growth strategy designed to capture growing consumer-led demand in our key end-markets of transportation, infrastructure, packaging, and consumer products in developing regions.”
For Saudi Aramco, president and CEO Amin H. Nasser said: “Dow’s larger stake in Sadara is an endorsement of the Kingdom’s vibrant ecosystem, and signals Dow’s confidence in our partnership as a model of mutually beneficial foreign direct investment.
“The time is right to fully leverage Dow’s global leadership to further contribute to the Kingdom’s economic transformation in line with Vision 2030.”
The Sadara petrochemical complex―the largest of its kind ever built in a single phase―is currently operating all of its 26 world-scale units that manufacture a portfolio of polymers, including elastomers and speciality chemicals.