Dow Chemical Co. (DOW ) on Wednesday said its wholly-owned subsidiary Union Carbide Corp. has completed the sale of its ownership in the Optimal Group of Companies to Malaysia's Petroliam Nasional Berhad, or Petronas, for an equity value of $660 million.
The Midland, Michigan-based chemical company had announced a deal to sell its ownership in Optimal Group of Companies to Petronas on July 30.
Dow Chemical and Petronas had agreed to enter into a commercial supply agreement allowing the two companies to continue serving the current customer base with products manufactured by Optimal. Dow Chemical would market Optimal's basic and performance chemicals products to Dow Chemical's existing customer base in Asia Pacific. The proceeds from the deal is intended to be used for further debt reduction, in-line with the company's de-leveraging plan.
Dow indicated the divestiture of Optimal to be consistent with its plans to increase its financial flexibility, improve its cash flow, and reduce debt.
Optimal, established in July 1998, currently comprises three joint ventures involving Petronas, Malaysia's national petroleum corporation, and Union Carbide. Headquartered in Kuala Lumpur, Optimal manufactures more than 70 products and serves key markets in the Asia-Pacific region.
DOW closed Tuesday's trading at $26.35 on the NYSE.
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