Mergers and acquisitions: Merger of Dow and Union Carbide gets the OK

The Dow Chemical Co. (Midland, MI) has received clearance from the U.S. Federal Trade Commission, as well as from the European Commission, the Canadian Competition Bureau, and other jurisdictions, for its merger with Union Carbide Corp. (Danbury, CT), under which Union Carbide will become a wholly owned subsidiary of Dow. As part of the regulatory approval process, several assets will change hands:

* Dow will transfer to BP Chemicals Ltd. its interest in technology developed jointly with BP and Chevron Phillips Chemical Co. LP under two research programs aimed at developing metallocene catalysts for gas-phase polyethylene.

* Univation Technologies, a joint venture between Union Carbide and ExxonMobil, will become a 50/50 joint venture between Dow and ExxonMobil. Union Carbide will contribute the Unipol polyethylene process technology licensing and conventional catalyst businesses to Univation. The venture's polyethylene catalysts include Ziegler-Natta, chrome-based, metallocene, and others.

* Dow will sell its global ethanolamines (EOA) business and North American Gas/Spec business to INEOS plc (Southampton, U.K.). The transaction includes manufacturing facilities in Plaquemine, LA, as well as the U.S. and Canadian Gas/Spec customer base, associated technology, trade names, and access to all of the MDEA capacity of Dow's Freeport, TX, plant (which Dow will continue to own and operate). INEOS will operate Dow's polyglycols and glycol ethers facilities in Plaquemine as a contract manufacturer.

* Huntsman International, LLC, will acquire Dow's global ethyleneamines (EA) business and Dow's Castmate ceramic processing additive business. The agreement includes Dow's manufacturing plant in Freeport, TX, with a nameplate capacity of 160 million lb/yr, and a long-term option to purchase 30 million lb/yr of ethyleneamines from Dow's Terneuzen, Netherlands, plant.

* Dow will acquire the polyurethanes business of Italy's EniChem S.p.A. and will divest Union Carbide Corp.'s 50% interest in Polimeri Europa. This will give Dow its first European source for toluene-diisocyanate (TDI) and enhances its methylene-diphenylene isocyanate (MDI), polyol, and polyurethane systems capability. The company expects to add approximately 118,000 m.t./yr TDI capacity, 80,000 m.t./yr MDI capacity, and 160,000 m.t./yr polyols capacity to its global manufacturing capabilities.