US-headquartered company Dow has reached an agreement with speciality materials provider Arkema to divest its flexible packaging laminating adhesives business for $150m.

This move is part of Dow's strategy to concentrate on its core, high-value downstream businesses. The Dow business is within its Packaging & Specialty Plastics segment.

The sale is expected to support Dow's Decarbonize & Grow and Transform the Waste strategies to capture more than $3bn in annual earnings growth by 2030, with the proceeds aiding the company's growth and shareholder value.

Dow's flexible packaging laminating adhesives business offers a range of high-quality solutions for customers in the food and medical sectors.

Arkema will significantly enhance its flexible packaging solutions portfolio through this acquisition, positioning itself as a major player in that market.

The transaction includes the transfer of five manufacturing sites located in Italy, the US, and Mexico.

These sites are responsible for producing solvent-based laminating adhesives, solventless laminating adhesives, and heat seal coatings.

Arkema chair and CEO Thierry Le Hénaff said: “We are very happy to announce this great acquisition which is perfectly in line with Arkema’s strategy to offer its customers innovative products with high technological content and continue to grow in the attractive adhesives segment.

“It will allow the group and Bostik to broaden its commercial and geographic presence in packaging and complete its product ranges in this demanding and rapidly evolving market, notably regarding sustainable development challenges. We are very happy to welcome Dow’s teams in this new development stage.”

The transaction value is approximately ten times the forecasted 2024 earnings before interest, taxes, depreciation, and amortisation.

Subject to regulatory approvals, the deal is anticipated to conclude by the end of 2024.

Dow will continue to maintain ownership of its water-based laminating adhesives and acrylic adhesives businesses within its Packaging & Specialty Plastics segment.

Additionally, Dow will continue to offer adhesive solutions through its Consumer Solutions and MobilityScience divisions.

"Dow to divest flexible packaging business to Arkema" was originally created and published by Packaging Gateway, a GlobalData owned brand.

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