Dow Chemical Considering Sale of 35% Stake in Saudi Arabia's Sadara

en.Wedoany.com Reported - On September 9, Dow Chemical is evaluating the sale of its 35% stake in Sadara Chemical Company. Saudi Aramco currently holds the remaining 65% stake in Sadara and may become a potential buyer, while other strategic investors or financial investors may also participate in the transaction. The relevant plans are still in the evaluation stage, and Dow has not yet made a final decision to sell.

Sadara Chemical Company was jointly established by Saudi Aramco and Dow in 2011, with a total investment exceeding US$20 billion, and its production base is located in Jubail Industrial City Phase II, Saudi Arabia. According to Sadara's official information, the complex consists of 26 integrated production units, achieved full commercial operation in 2017, and has an annual production capacity of more than 3 million tons of chemicals and plastics.

Sadara's current shareholding structure is 65% held by Saudi Aramco and 35% held by Dow. Saudi Aramco's 2024 annual report and Sadara's 2024 ESG materials both confirm this shareholding ratio.

The chemical complex covers polyethylene, polyurethane raw materials, and various specialty chemicals, including isocyanates, polyols, elastomers, ethyleneamines, propylene glycol, and butyl glycol ether, among other products. Some products from the 26 units had not previously been produced locally in Saudi Arabia, and Sadara also has a raw material supply relationship with the adjacent PlasChem Park downstream manufacturing park.

Dow's recent financial documents show that as of June 30, 2026, its investment balance in Sadara was negative US$793 million, compared with negative US$901 million at the end of 2025. Because Sadara-related liabilities and guarantee obligations have reached the total amount of Dow's existing relevant obligations and commitments, Dow has suspended recognition of its share of Sadara's equity-method losses starting from the first quarter of 2026.

Under Sadara's debt restructuring arrangement, the company had established a US$500 million revolving credit facility, with corresponding guarantees provided by Dow. In 2025, Sadara drew US$80 million from this facility. After the facility matured in the second quarter of 2026, Dow paid cash to fulfill its US$80 million guarantee obligation; during the same period, Dow also opened a US$86 million letter of credit, which will mature in the fourth quarter of 2026.

In the first half of 2026, Dow also recognized a loss of US$211 million related to the adjustment of Sadara project financing guarantee liabilities. Dow's second-quarter financial report shows that the operating profit of its Industrial Intermediates & Infrastructure business improved year over year, but Sadara continues to affect its financial items related to non-consolidated joint ventures.