Dow Inc. (DOW) is exploring a possible exit from Sadara Chemical Co., its $20 billion joint venture with Saudi Aramco (ARMCO), as the U.S. company restructures its portfolio during a prolonged chemical-industry downturn, Bloomberg News reported, citing people familiar with the matter.
Dow (DOW) owned 35% of Sadara as of last year, while Aramco held the remaining interest. Aramco (ARMCO) could acquire Dow’s stake, though other corporate buyers or financial investors may also consider bids. Discussions remain preliminary, and Dow could decide against a sale.
For investors, a divestiture could reduce Dow’s exposure to Sadara’s debt and future cash requirements while freeing capital for businesses with stronger expected returns. The financial benefit would depend heavily on the sale price and whether Dow retains any guarantees or other obligations.
Established in 2011, Sadara operates 26 manufacturing units capable of producing more than 3 million metric tons of chemicals and plastics annually.
Dow (DOW) also has exposure to the venture through a guarantee on a $500 million revolving credit facility intended to cover possible funding shortfalls. Sadara drew $80 million from that facility during the fourth quarter of 2025, according to Dow.
Sadara remains strategically important to Aramco (ARMCO), which is expanding its chemical operations to generate more value from its hydrocarbon production. The venture also supports Saudi Arabia’s effort to develop industries beyond oil. Aramco (ARMCO) separately controls Sabic, the kingdom’s largest chemical producer.
