Dow To Sell Its Styron Unit To Bain For $1.63 Billion (DOW)

Dow Chemical Co. (NYSE: DOW), the largest chemical maker in the U.S., said that it would sell its Styron basic plastics unit to Bain Capital Partners for $1.63 billion.

Dow looks to strengthen its balance sheet from this sale, following the high-priced buyout of Rohm and Haas in 2009.The sale is also expected to help Dow to move away from commodity chemicals and increase its concentration in the higher-margin specialty chemicals sector.

The deal gives Dow the option to keep a 15 percent stake in Styron and also includes supply agreements of $400 million, where Dow will supply the inputs to Styron for plastics production. The deal is expected to be concluded by August.

Dow aims to realize $2 billion in 2010 by selling its nonstrategic assets.

The company’s shares gained 2.5 percent to $29.4 in premarket trading.