Dow, Inc. is weighing an exit from a $20 billion chemical joint venture project in Saudi Arabia, with Saudi Aramco potentially becoming the acquirer.

According to informed sources, Dow, Inc. (DOW.US) is considering exiting the $20 billion chemical joint venture it formed with Saudi Aramco. This move is part of the American company's strategy to respond to the prolonged downturn in the industry and accelerate the optimization and adjustment of its asset portfolio. As of last year, Dow, Inc. held a 35% stake in the joint venture, Sadara Chemical Co., with the remaining shares owned by Saudi Aramco. Sources indicate that Saudi Aramco may seize this opportunity to acquire the shares held by Dow, Inc., thereby increasing its control over the project. Due to the sensitive nature of the information, the sources requested anonymity. It is reported that other strategic investors or financial entities may also make bids for the shares held by Dow, Inc. However, relevant parties added that no final decision has been made yet, and Dow, Inc. may ultimately choose to retain its existing stake. As a result of this news, Dow, Inc. shares rose approximately 5% in pre-market trading in the U.S. Dow, Inc. representatives did not respond to requests for comment, while Saudi Aramco declined to comment. In the context of a continued industry slump over the past few years, Dow, Inc. has been reviewing its investment portfolio and capital allocation, aiming to focus on core business areas that can yield higher returns. The joint venture with Saudi Aramco is one of Dow, Inc.'s most significant partnerships in the Middle East. If it ultimately decides to exit, it will mark an important strategic shift for the company in the region. Sadara Chemical was established in 2011 with the aim of creating a comprehensive chemical complex, with total investments exceeding $20 billion. The complex operates 26 production units and has an annual output of more than 3 million tons of chemicals and plastic products. During the investment process, Dow, Inc. gradually accumulated debt exposure related to the joint venture, including guarantees for a $500 million revolving credit facility to help address potential funding shortages. According to Dow, Inc., Sadara Chemical had withdrawn $80 million from that facility by the fourth quarter of 2025. If it successfully exits, Dow, Inc. is expected to reduce its future exposure to potential funding needs of the joint venture. Meanwhile, Sadara Chemical remains a crucial part of Saudi Aramco's strategy to expand its chemical business and enhance the added value of hydrocarbons. This direction is also highly aligned with Saudi Arabias national goals of promoting economic diversification, reducing reliance on oil, and strengthening the non-oil economy. It is worth mentioning that Saudi Aramco is also the controlling shareholder of the largest chemical company in Saudi Arabia, Saudi Basic Industries Corporation (SABIC).