Dow and Reichhold Plan to Join Forces in Specialty Latexes
The Dow Chemical Company and Reichhold Inc. announced today that they plan to form a joint venture, Dow Reichhold Specialty latex LLC, by combining the specialty latex businesses of Dow's Emulsion polymers unit and Reichhold. As part of this transaction, Dow would acquire Reichhold's carpet and paper latex businesses. Dow and Reichhold expect to finalize these transactions and seek the necessary regulatory approvals in the coming months. Terms of the transactions will not be disclosed.
The joint venture will focus primarily on butadiene-based latexes, but also would have access to a broad range of latex chemistries. These products are used in a wide range of end use applications. The joint venture is expected to employ 400 people and will have sales, marketing and research support in North America, Latin America, Europe and the Pacific.
"The formation of Dow Reichhold Specialty Latex LLC will accelerate growth of our combined specialty latex businesses on a global scale," said Ted Cosse, global vice president of Dow Emulsion Polymers. "More importantly, the combined products, technologies and global presence of the new company will create a culture and a capability that is better able to meet the unique needs of specialty latex customers around the world."
Yoshi Kawashima, chairman and CEO of Reichhold, said the new business would offer its customers a wider portfolio of products and services than previously available.
"The new company is an attractive blend of the best each parent company has to offer the specialty latex customer," Kawashima said. "Plus, it allows Reichhold the opportunity to focus our energies on globalization and our core products while giving specialty latexes the chance to grow and provide new and better solutions to those market segments."
Senior director of corporate planning for Reichhold, Jeffrey L. Welker, will be named president of the new joint venture, subject to completion of the transactions. "Dow Reichhold Specialty Latex will be a leading producer of synthetic emulsions for specialty applications," said Welker. "We will obtain a diverse portfolio and a wealth of expertise and technology from our parent companies. The combination of skills and scope brought together will allow Dow Reichhold Specialty Latex to create real value in customer applications. Our customers should expect world class technology and customer focus on both a regional and global level as a result."
Upon completion of the transaction, the joint venture will be headquartered in Research Triangle Park, NC. The joint venture will operate two latex production facilities located in Cheswold, Delaware, and Kensington, Georgia, and access Dow's extensive global manufacturing network. New facilities are already being planned to service fast growing markets in the Pacific.
As part of the planned transactions, Dow also would purchase Reichhold's carpet and paper latex businesses. Cosse added, "We look forward to acquiring the unique technologies, products and services of Reichhold that will allow Dow to expand into new carpet and paper latex market segments."
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