(Sept 9): Dow Inc is considering plans to exit its US$20 billion (RM81.3 billion) chemicals partnership with Saudi Aramco, people familiar with the matter said, as part of the US firm’s efforts to reshape its portfolio amid a prolonged downturn in the industry.
As of last year, Dow held a 35% stake in the venture, known as Sadara Chemical Co. Aramco holds the remainder and could potentially use the opportunity to acquire Dow’s stake and increase its ownership, the people said, declining to be identified discussing confidential information.
Other strategic or financial investors could also bid for Dow’s holding, the people said. No final decisions have been made and the company could eventually decide to not proceed with a deal, they added.
Shares in Dow rose about 3.7% in US pre-market trading.
Representatives for the firm did not respond to requests seeking comment. Aramco declined to comment.
Amid a years-long downturn in the sector, Dow has been reviewing its portfolio and capital allocation to focus on businesses it thinks will generate higher returns. The venture with Aramco is among its most important partnerships in the Middle East and an exit would signal a major shift in the firm’s regional priorities.
Sadara was established in 2011 to develop an integrated chemicals complex with a total investment of over US$20 billion. It operates 26 manufacturing units and produces more than 3 million metric tons of chemicals and plastics annually.
Over the course of its investment, Dow has built up exposure to Sadara’s debt, including a guarantee on a US$500 million revolving credit facility to help finance its share of potential funding shortfalls. Sadara drew US$80 million from that facility in the fourth quarter of 2025, according to Dow.
An exit could help Dow reduce exposure to future funding requirements at the venture. Meanwhile, Sadara remains an important part of Aramco’s strategy to further expand into the chemicals sector and extract greater value from hydrocarbons. That would also chime with Saudi Arabia’s goals to diversify income away from oil and grow the non-oil economy.
The oil giant is also a controlling shareholder in Saudi Arabia’s biggest chemical producer, Sabic.
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