By JACK KASKEY
Dow Chemical, facing pressure from Dan Loebs Third
Point to split itself in two, said an internal strategic
review concluded that such a move would reduce the value of
the largest US chemical company.
The review by the board, management team and external
advisers found that creating separate petrochemical
specialty-chemical businesses would negatively affect
Dows value proposition, the Midland,
Michigan-based company said in a regulatory filing. A breakup
also wouldnt improve productivity or capital
allocation, Dow said.
Third Point, an activist investor founded by Loeb, said in a
Jan. 21 letter that Dow is its top holding and could add
billions of dollars to earnings by spinning off commodity
chemicals and plastics. Dow CEO Andrew Liveris defended his
strategy of integrating commodity chemicals with specialty
products during a Jan. 29 conference call.
Dow believes that specific actions it has taken to
transform Dow from a commodity-based model into a vertically
integrated science company focused on specialty materials,
agriculture and specialty plastics is the right strategy to
maximize value for all of our shareholders in the short and
long term, the company said in the filing.