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||31 July 2009
Malaysia’s Petronas acquires Dow’s stake in Optimal
Petroliam Nasional Bhd (Petronas), Malaysia’s state energy company, is buying out the Dow Chemical Co's stake in the Optimal Group of Companies, a manufacturer of petrochemical products, for $660 million, reported Business Times, a local business daily.
Established in July 1998, Optimal comprises three joint ventures involving Petronas and Union Carbide Corp (UCC), a wholly-owned subsidiary of Dow. The companies are Optimal Olefins (Malaysia) Sdn Bhd, Optimal Glycols (Malaysia) Sdn Bhd and Optimal Chemicals (Malaysia) Sdn Bhd.
Petronas will use its own funds to pay for the purchase, reported Business Times.
The transaction, subject to customary conditions and approvals, is expected to be concluded by the end of the third quarter.
"Our purchase of Dow's equity in Optimal will enable us to strengthen our presence in olefins and reinforce growth of the Malaysian petrochemical industry," Petronas president and chief executive officer Tan Sri Mohd Hassan Marican said in a statement Thursday.
"We have had an excellent working relationship with Dow over the years in Optimal and we expect that will continue with Dow now becoming one of Optimal's largest customers."
The deal will see Dow and Petronas enter into a commercial supply agreement, which allows the two companies to continue serving the current customer base with products made by Optimal.
Dow will market Optimal's basic and performance chemical products to the former's existing customer base in Asia-Pacific. Dow chairman and chief executive officer Andrew N Liveris said it will hand over the management of Optimal businesses to Petronas while at the same time remaining committed to its customers in the region.
The change in Optimal ownership is not expected to have any immediate effect on Dow's workforce in the region. Optimal, which has its headquarters in Kuala Lumpur, makes more than 70 products for Asia-Pacific markets. Its petrochemical facility is located in Kerteh, Terengganu.
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