NEW YORK (AP) -- Dow Chemical sold its Styron plastics division to Bain Capital for $1.63 billion, the company said Tuesday, ending months of circling by Bain and other private equity firms.
For Dow, the deal is a further unloading of debt after a turbulent year and for the markets as a whole, it may signify the start of an uptick in big mergers and acquisitions, which had cooled with the recession.
Other private equity firms such as TPG and Apollo Management were rumored to be in the hunt for Styron, a business with annual sales estimated around $3.5 billion and 40 facilities worldwide.
Dow put the company up for sale in July at a time when it was aggressively trying to cut costs following a contentious $16.5 billion buyout of specialty chemicals manufacturer Rohm & Haas.
Based in Midland, Mich., Dow has also moved rapidly to reshape itself and focus on specialty chemicals. Dow CEO Andrew Liveris wants to distance the company from the volatility that comes with traditional chemicals sold in massive quantities.
"This transaction is yet another step in our disciplined approach to portfolio management," Liveris said. "We are committed to further focusing our portfolio by shedding non-strategic assets that can no longer compete for growth resources inside the company."
Dow said Tuesday it has an option to receive up to 15 percent of the equity of Styron as part of the sale consideration.
The companies are expecting the deal to close by August, pending regulatory approvals and closing conditions.
Styron has about 1,900 employees and its products are sold in the automotive, appliance, electronics, tire and packaging industries.
Shares of Dow Chemical Co. fell 9 cents to $29.92 in early trading Tuesday.
