Dow Chemical Co. (DOW) has agreed to create a joint petrochemicals venture together with Petrochemical Industries Co. of Kuwait [PCI] in exchange for $9.5 billion. The venture will be split 50/50 between the two companies and will be fully integrated. Andrew Liveris told CNBC's Squawk Box Thursday morning shortly after the deal was announced, “this is win-win-win: a win for [Dow], a win for [Dow] shareholders and a win for PCI.” Despite the deal valuing Dow’s petrochemicals unit at a total of $19 billion, or nearly half of Dow’s $39.4 billion market cap, Liveras insisted it only represented a third of Dow’s total business, saying, “the global petrochemical and plastics business is highly undervalued – the NYSE has been discounting [Dow’s] shares for some time now.” The new venture will employ roughly 5,000 people to produce polyethylene and other materials, with expected pro forma annual revenues of $11 billion. Shares of Dow were last up 4.8% in Frankfurt trading.
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