Dow Chemical (DOW.US) reportedly considering exiting the 20 billions USD Saudi chemical joint venture, with Saudi Aramco as a potential buyer

Zhitong Finance APP has learned from informed sources that Dow Chemical (DOW.US) is considering exiting its chemical joint venture with Saudi Aramco, which is valued at up to $20 billion. This move is part of the American company’s efforts to address the industry’s prolonged downturn and accelerate the optimization and adjustment of its asset portfolio.

As of last year, Dow held a 35% stake in the joint venture—Sadara Chemical Co.—with the remaining shares owned by Saudi Aramco. The sources said that Saudi Aramco may take this opportunity to acquire Dow’s stake, further increasing its control over the project. Since the information is not yet public, the sources requested anonymity.

Other strategic or financial investors may also bid for Dow’s stake. However, the people added that no final decision has been made, and Dow could ultimately choose to retain its current holdings.

On the news, Dow’s share price rose as much as 5% in U.S. pre-market trading.

A Dow spokesperson did not respond to requests for comment, while Saudi Aramco declined to comment.

Against the backdrop of a prolonged industry slump, Dow has been reviewing its investment portfolio and capital allocation, aiming to focus on its core, higher-return business areas. The joint venture with Saudi Aramco is one of Dow’s most important partnerships in the Middle East, and an eventual exit would mark a significant shift in the company’s regional strategic focus.

Sadara Chemical was established in 2011 with the goal of building an integrated chemical complex with a total investment exceeding $20 billion. The complex operates 26 production units, manufacturing more than 3 million tons of chemical and plastic products annually.

During the investment process, Dow gradually accumulated debt exposure related to the joint venture, including providing guarantees for a $500 million revolving credit facility to help address potential funding shortages. According to Dow, Sadara Chemical had drawn $80 million from this facility by the fourth quarter of 2025.

If the exit is successful, Dow is expected to reduce its future exposure to potential capital requirements from the joint venture. Meanwhile, Sadara Chemical remains a key part of Saudi Aramco’s strategy to expand its chemical business and enhance the added value of hydrocarbons. This direction also closely aligns with Saudi Arabia’s national goal to promote economic diversification, reduce dependence on oil, and strengthen its non-oil economy.

It is worth noting that Saudi Aramco is also the controlling shareholder of Saudi Basic Industries Corporation (SABIC), the largest chemical company in Saudi Arabia.