DHAHRAN, Saudi Arabia—Dow Chemical Co. and Saudi Aramco signed a non-binding memorandum of understanding for Dow to acquire an extra 15 percent stake in their Sadara joint venture.
Through the proposed deal, Dow and Saudi Aramco each would hold a 50 percent equity stake in Sadara, according to an Aug. 28 Aramco release. Financial terms were not disclosed.
The equity equalization, Aramco said, would follow the intended separation of the Materials Science Company, within 18 months after the close of the merger between Dow and DuPont on Aug. 31; 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."
Amin H. Nasser, Saudi Aramco president and CEO, said that "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.