WSJ: PE Firms Circle Dow’s Ag Business

(Reuters) – Dow Chemical Co (DOW.N) is in talks with a group of private-equity firms about an investment in its agricultural-sciences unit, said a Wall Street Journal report, citing people familiar with the matter.

Dow is in early-stage discussions with a group of firms including Blackstone Group Inc. and Kohlberg Kravis Roberts & Co. about a multibillion-dollar minority stake in the division, said the article on the Wall Street Journal’s website.

Dow is actively seeking funds to complete its planned purchase of specialty chemical maker Rohm and Haas Co (ROH.N). Dow’s has been forced to delay the closing of this deal, after Kuwait backed out of a $17.4 billion joint venture with Dow — the proceeds from this deal were to fund the Rohm and Haas buy.

Rohm and Haas has sued Dow in an attempt to force Dow to close the deal. A trial in the matter is scheduled for March 9.

Analysts, have suggested that Dow could raise between $5 billion and $7 billion from the sale of its AgroSciences business, which makes insecticides and licenses traits used in genetically modified seeds.

The business has also received attention from rival Swiss crop-sciences company Syngenta (SYNN.VX), among other potential corporate buyers, said the WSJ report.

“We believe that management is considering all of its options, with a sale of AgroSciences being one of them,” said HSBC analyst Hassan Ahmed, in a note to clients.

“If Dow decides to sell assets to raise cash, the business would likely be the first to be put up for sale, given its lack of integration with the rest of the businesses, and in this current weak macroeconomic environment, the relative ease of finding a potential suitor for a defensive business.”

A Dow spokesman declined to comment on whether Dow was in talks to sell the whole or a part of the AgroSciences business, but said the company is considering all options.

“Given the unprecedented economic environment, we continue to assess all options for providing greater financial flexibility through the current period,” said Dow, in a statement.

“While Dow’s has been moving forward on a number of fronts in recent weeks, no specific actions have been finalized.”

Last month, Dow’s Chief Executive Andrew Liveris did confirm that the largest U.S. chemical maker is currently considering the sale of about a dozen assets. (Reporting by Euan Rocha)