Dow Chemical to Reduce Stake in Kuwait Joint Ventures

Dow Chemical has decided to reduce its stake in two multi-billion dollar petrochemicals joint ventures with Kuwait, the U.S. firm and its Kuwaiti partner said on Thursday.

"Dow will reconfigure and reduce its equity base in the MEGlobal and Greater Equate joint ventures," with Kuwait's state-owned Petrochemicals Industries Co. (PIC), the U.S. firm said in a statement on its website.

PIC said it has been informed by its partner that it intends to reduce its percentage stake inside and outside Kuwait. It provided no further details.

Dow and PIC each hold 42.5 percent stakes in Equate, with the rest held by private Kuwaiti firms Boubyan Petrochemical Co and Al-Qurain Petrochemicals.

Equate, which began operations in 1997, has a total annual production capacity of 5.0 million tonnes, mainly of polyethylene, ethylene glycol and styrene.

MEGlobal, headquartered in Dubai, manufactures and markets monoethylene glycol and diethylene glycol. Established in July 2004, MEGlobal currently markets over 2.5 million tonnes a year globally.

Dow said the move, expected to be finalized in mid-2015, is a purely investment decision.

"While Dow will retain a substantial stake in these long-term partnerships, this effort will open opportunities for new investment in these successful and growing enterprises.

"Dow remains committed to maximizing the overall value of both MEGlobal and the Greater Equate joint ventures to further enhance their already demonstrated strong value and performance," it said.

"This strategic action allows us to redeploy capital to more strategic purposes," said Andrew Liveris, Dow's chairman and chief executive officer.

Last year, Kuwait paid a $2.2 billion penalty to Dow after unilaterally pulling out of a signed contract for a $17.4 billion joint venture.

Kuwaiti lawmakers criticized the deal and set up a commission of inquiry.