Dow Chemical to divest more assets in 2010; predicts 2012 earnings outlook

Dow Chemical to divest more assets in 2010

NEW YORK — Dow Chemical Co. said Thursday it plans to sell more assets in 2010 as it continues to work toward paying off debt from its $16.5 billion acquisition of Rohm and Haas in April.

The company also predicted earnings in 2012 of $4 per share to $4.50 per share, well above 2008 levels of $1.82 per share, excluding special items.

The news of further asset sales followed an announcement that the company will sell its powder coatings business for an undisclosed amount. Including this deal, Dow said its divestiture activities are on target to yield more than $3.5 billion in gross proceeds.

In a meeting with investors, CEO Andrew Liveris mapped out a three-path process that identifies options for further debt reduction of about $12 billion.

The first path involves an additional $3.5 billion in divestitures, which includes the sale of the company’s Styron business. Dow expects this deal to close in the first quarter of 2010. The company also plans to divest 10 to 15 other businesses which range in size between $100 million and $300 million in annual revenue.

For the second path, Dow said it could receive proceeds from a resolution of its dissolved Kuwait joint venture. A spokesman said the size of proceeds is “not defined” yet.

Lastly, the company is looking to gain from reducing its stake in its basic chemicals business, as part of its plan to focus on its more profitable specialty chemicals business.

After the conference call, Dow said its unit Kow Kokam LLC acquired nearly all assets of lithium rechargeable battery maker Kokam America Inc. The company also announced the transfer to Dow of collective assets from High Power Lithium, a company focused on the development of technology for use in all lithium ion batter applications. Terms of both agreements were not disclosed.

Shares of Dow jumped $1.89, or 7 percent, to close at $28.60. Earlier in the day shares reached a new 52-week high of $28.88.