Dow Chemical Buys Upjohn’s Polymer Chemical Operations
MIDLAND, Mich. (AP) _ Dow Chemical Co., continuing to expand its specialty chemical business, will buy the polymer operations of the Kalamazoo-based Upjohn Co., the two companies said Thursday in separate announcements.
″The purchase price and details of the agreement were not disclosed,″ Dow said in a written statement issued from its Midland headquarters.
Paul F. Oreffice, Dow president and chief executive officer, said the acquisition represented a logical broadening of the urethanes portion of Dow’s specialty chemical business.
In recent years Dow has placed less emphasis on basic chemicals, concentrating instead on chemicals produced through more complicated processes.
Urethanes are a class of chemical widely used as insulation, said Dow spokesman Gordon Butte.
The acquisition will increase the size of Dow’s urethanes business by about 30 percent, the company said.
Polymer chemicals are used in automotive bumpers, dashboards and seat- cushions, and as insulation in houses, said R.D. LaRue, Upjohn spokesman.
Upjohn recorded polymer chemical sales of $287.4 million last year, an amount the company said represented 13 percent of its total sales.
R.T. Parfet Jr., Upjohn chairman and chief executive officer, said the divestiture will have no material effect on earnings and ″will provide a favorable contribuion to cash flow.″
Upjohn’s polymer chemical operations employ about 960 people in five locations in the United States, West Germany, the Netherlands, Portugal, Italy and Japan, Dow said.
Upjohn said it will retain its fine-chemical and pharmaceutical-chemical businesses.
LaRue said the transaction is ″not a major change in direction″ for Upjohn.
″We have always been primarily a human health care operation, and our human health care business accounts for approximately 65 percent of our net sales. ... This move if it does anything serves to restate our commitment to health care,″ he said.
The transaction has been approved by directors of both companies but requires federal regulatory approval, the companies said. Dow said it expects the transaction to close in about 60 days.