UPDATE: Dow Announces Sale of Global Polypropylene Business to Braskem for $340 Million

The Dow Chemical Company (NYSE: DOW) announced today that it has signed a definitive agreement under which Dow's global Polypropylene business will be divested to Braskem (NYSE: BAK) for a total enterprise value to Dow of $340 million, comprised of $323 million cash purchase price plus other cash and contingency assumptions of $17 million. Enterprise value multiple to Dow is 6.7x EBITDA(1). Dow expects to report a gain on this divestment, and the transaction is expected to close by the end of the third quarter 2011, pending regulatory approval. In addition to this transaction, the two companies will continue to evaluate potential future collaborations on growth opportunities in connection to their strategies. “This divestiture is yet another strong example of Dow's disciplined and ongoing approach to portfolio management and is directly aligned with our strategy to transform our Performance Plastics franchise to focus on downstream, technology-differentiated solutions,” said Andrew N. Liveris, Dow's Chairman and Chief Executive Officer. “This business has delivered historic margins that do not meet our expectations moving forward and is no longer core to Dow's strategy. We are shifting our Plastics portfolio from a commodity focus to that of a performance focus. This divestment is directly in line with that strategy, and allows us to continue to focus on our three main priorities: retiring debt, remunerating shareholders and investing in our innovation agenda so that we deliver consistent earnings growth.”