The Dow Chemical Co. and Saudi Aramco have signed a non-binding Memorandum of Understanding (MOU) for Dow to acquire an additional 15% ownership interest in Sadara Chemical Co., a joint venture (JV) developed by the two companies.
Under the new proposal, both companies would hold a 50% equity stake in the JV.
Andrew Liveris, Dow’s Chairman and CEO, said: “Sadara is the result of a game-changing partnership between Saudi Aramco and Dow by delivering market-driven solutions that support the diversification of the country’s economy […] Increasing our equity stake in this iconic joint venture is a powerful example of our strategic partnership with Saudi Aramco and 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.”Saudi Aramco President and CEO, Amin H. Nasser, added: “We are proud of our partnership with Dow given its preeminent stature among the world’s leading chemical companies. 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 potential equity equalisation would occur following the intended separation of the Materials Science Company within 18 months after the close of the merger of equals between Dow and DuPont on 31 August, and Sadara’s completion of the Creditors’ Reliability Test, which is part of the limited-recourse financing used to fund the Sadara project development. The anticipated financial impact of the potential transaction is not being disclosed.
The Sadara financial structure and governance will remain unchanged.
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