Dow AgroSciences Being Shopped Around
(Image Courtesy of Dow AgroSciences)
The Dow Chemical Co. (NYSE: DOW) says it is "examining strategic options" for its Indianapolis-based subsidiary Dow AgroSciences LLC. Dow says, in the face of a consolidating global agricultural market, it will "review all options with a best-owner mindset, with a focus on creating new synergies." It says Dow AgroSciences is a "highly attractive and well-positioned business," but wants to find additional value for shareholders by considering all options.
The move is part of a "portfolio transformation" detailed Thursday by Dow, which also includes its Dow Corning business and joint ventures in Kuwait.
During its 25 anniversary celebration last year, Dow AgroSciences said it employs more than 8,000 globally. Around 1,500 members of its work force are based in Indianapolis.
Last May, the parent company announced a worldwide staffing reduction of up to 1,750 employees.
In its third quarter earnings report, Dow says Dow AgroSciences reported a loss of $39 million, compared to a loss of $15 million during the same quarter a year earlier.
Recent news hasn’t been all negative for Dow AgroSciences. In January, it completed its second-largest acquisition with a deal for the seed business of Brazil-based Coodetec.
The company also received U.S. Environmental Protection Agency approval for what Chief Executive Officer Tim Hassinger calls "the biggest project we’ve ever been involved with, " Enlist Weed Control System herbicide. Hassinger says Enlist’s potential market includes approximately 70 million acres of American farmland.
Dow AgroSciences announced an agreement last September that harkened back to its beginnings. It was launched in the late-1980s as DowElanco, a joint venture between Dow Chemical and Indianapolis-based Eli Lilly and Co. (NYSE: LLY). Dow eventually bought the whole subsidiary, naming it Dow AgroSciences. Late last year, Greenfield-based Elanco, the animal health division of Lilly, and Dow AgroSciences in Indianapolis have reached a research and development agreement focusing on increasing meat and milk production for livestock producers.
Dow Chairman and Chief Executive Officer Andrew Liveris says Thursday’s announcements "further illustrate the strength of Dow’s financial position, and our unwavering commitment to consistently and increasingly reward shareholders. Over the last several years, we have built a solid foundation of increasing earnings performance, and have repositioned our enterprise."