The Dow Chemical Company Plans to Sell Off Chlorine Business (DOW)

The Michigan-based diversified chemical maker, Dow Chemical (DOW), is reportedly planning to sell off the majority of its chlorine business, which is the company’s oldest operating segment.Dow Chemical is planning to move away from a diversified product lineup and will instead look to focus on higher-growth segments that experience less volatility compared to the very commodity price-sensitive nature of materials businesses. The company plans to shut down about 800,000 tons of chlorine capacity from its production facility in Freeport, Texas. In total, Dow Chemical plans to sell or spin off commodity chemical assets worth up to $4 billion in the next 18 to 24 months.

Andrew Liveris, DOW’s CEO, told Reuters, “Exiting our longest, oldest business tells you that we are prioritizing our capital on higher margin, more consistent earnings growth businesses.” According to sources, Dow Chemical is also looking to sell off its epoxy and brine businesses, further showcasing the company’s commitment to reducing its exposure to commodity price swings.

Dow Chemical shares jumped higher to start off the week, gaining 2.36% as the closing bell rang. The stock is up more than 23% year-to-date.