[MIDLAND] Dow Chemical Co will separate a portion of its century-old chlorine business and sell it to Olin Corp in a tax-efficient deal worth US$5 billion as part of efforts to shed low-margin assets.
The deal will make smaller rival Olin the world's largest producer of chlor-alkali, which is used to make chlorine and caustic soda. These chemicals are used in a variety of industries such as healthcare, textiles and automotive.
Dow, which had been pressured by activist investor Dan Loeb to break itself up, first announced plans to sell a bulk of its chlorine operations in 2013.
The company averted a proxy fight with Loeb last November by agreeing to add four independent directors to its board.
Dow has turned its focus to more profitable businesses such as packaging, electronics and agriculture.
Chief Executive Andrew Liveris said there could be more deals over the next 12 months as the company simplifies its joint ventures.