Completion of Dow-Union Carbide Merger Makes Dow More Competitive in Global Polyethylene Marketplace

07-Feb-2001

With the completion of the merger between Dow and Union Carbide, Dow's global polyethylene (PE) business improves its position as a leading polyethylene supplier, and gains the strength and resources needed to more effectively compete in today's global marketplace.

"The combination of Dow and Union Carbide - two of the world's most technologically advanced chemical companies - will bring customers an enhanced technology platform and one of the industry's broadest range of polyethylene solutions. We are confident we can meet the most challenging application needs," says Len Azzaro, global vice president, Polyethylene, The Dow Chemical Company. "We are looking forward to integrating the talents, resources, and best practices of both Dow and Union Carbide. Our intent is to leverage these strengths to the benefit of our customers."

Enhanced Technology Platform The merger reaffirms Dow's position as a PE technology leader. In addition to retaining its world-class INSITE* Technology used in the solution process, the merger provides Dow full access to UNIPOL PE gas phase process and catalyst technology assets that are owned by Univation Technologies.

In the terms of the agreement, Union Carbide, now a subsidiary of Dow, contributes the UNIPOL PE licensing and PE conventional catalyst businesses to Univation Technologies. Dow becomes a co-owner of Univation Technologies with ExxonMobil Chemical. Dow will retain the income from the divested businesses for licenses entered into prior to the formation of Univation Technologies.

Univation becomes the sole interface for gas phase PE licensing and gas phase PE catalysts for existing UNIPOL licensees.

Dow has further agreed to divest to BP Amoco those patents and other assets related to metallocene catalyst technology in gas phase polyethylene processes for which Dow and BP formerly had a joint development agreement. This agreement refers to a limited segment of existing Dow polyethylene technology only. Dow will retain all of its ownership and its rights to practice metallocene technology (INSITE* Technology) in its solution process.

"We believe these agreements remove barriers," says Azzaro. "The technology licenses relating to Univation, Dow, ExxonMobil, and BP promote a climate that is favorable to the accelerated development of metallocene and gas-phase technologies and services, and that's of significant benefit to the industry, and more specifically, our customers."

Unmatched Product Base The merger brings together two of the world's most diversified PE product portfolios, combining well-known products such as industry leading DOWLEX* linear low density polyethylene (LLDPE) resins, Saran* polyvinylidiene chloride (PVDC) barrier films and resins, PRIMACOR* copolymers, and AFFINITY* polyolefin plastomers and ELITE* enhanced polyethylene products made via INSITE* Technology from Dow; and Union Carbide trademarks, such as TUFLINTM LLDPEs and Super TUFLINTM LLDPEs, FLEXOMERTM very low density polyethylenes (VLDPEs), and UNIVALTM and UNIPOLTM high density polyethylene (HDPE) resins.

The combined product portfolio will allow Dow to participate in virtually every segment in which PE resin is used, including applications in agricultural films, bottles, tubes and drums, consumer bags and packaging, fibers, food packaging and coatings, health and hygiene films and nonwovens, heavy-duty sacks, plastic pipe, sheets and membranes, shrink and stretch films, toys and play equipment.

Expanded Manufacturing Capacity Also as a result of the merger, Dow adds to its manufacturing infrastructure plants in North America, Latin America, Asia/Pacific and the Middle East, bringing global nameplate manufacturing capacity to 18 billion pounds (8.2 MMT) annually. These new assets are located at Seadrift, Texas; Taft, La.; Prentiss, Alberta, Canada; as well as joint ventures in Montreal, Canada; Cubatao, Brazil; Shuaiba, Kuwait, and

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