Breaking News

Investor Activist Calls for a New Day at Dow Chemical

January 21, 2014

Dan Loeb wants the company to split in two.

How now Dow Chemical? Activist investor Dan Loeb says Dow Chemical should divide into two firms as it pursues its goal of transforming itself into a specialty chemicals company. Loeb runs Third Point Management, Midland, MI, which has a big stake in Dow Chemical.


Specifically, the company should split into a more profitable Dow Petchem Co. and a "true" specialty firm called Dow Specialty Co., according to the investment letter.


"Dow's petrochemical operational strategy has been to migrate downstream, supposedly to earn higher margins," the letter says. But Third Point argues that strategy "seems misaligned" given a "commoditization of numerous downstream derivatives margins," which has been driven by emerging markets growing their downstream derivatives capacity and by a North American shale energy boom that's reduced raw material costs. Third Point is calling for a standalone company called Dow Petchem that houses Dow's commodity petrochemical segments and that moves away from focusing downstream. The fund says the company's other businesses would be dubbed Dow Specialty -- "the specialty chemicals leader that Dow has aspired to become for much of the past decade."


Rebecca Bentley, a spokeswoman for Dow Chemical, said in a statement that the company had delivered shareholder value. “We engage with all of our owners to understand their views and we welcome all constructive input with a common goal of enhancing long-term value,” she said. “We constantly review our company at the management and board level to increase our shareholder value and competitiveness.”


In December, Dow Chemical announced a plan to shed about $5 billion worth of assets in a streamlining effort.


Loeb, an investor known for his poison pen, has previously taken on companies likes Yahoo and Sony. The Yahoo campaign culminated in the hiring of Marissa Mayer as chief executive of the web company. But Sony has rebuffed Mr. Loeb’s proposal that it spin off part of its entertainment arm.

  • Cargo Says Aloha To Spring/Summer

    Cargo Says Aloha To Spring/Summer

    Christine Esposito, Associate Editor||February 13, 2017
    Cargo Cosmetics has rolled out its new Spring/Summer collection with Hawiianan singer Anuhea.

  • Monday Morning Quarterback

    Monday Morning Quarterback

    Christine Esposito, Associate Editor||February 6, 2017
    Super Bowl commercials are big business. Let’s look at some of personal and household care brands that bought spots this year

  • Catch These Rising Stars of Beauty

    Catch These Rising Stars of Beauty

    Nancy Jeffries, Contributing Editor||February 6, 2017
    Who won what at Fashion Group International's Rising Star awards show

  • What the Halal  Is Going On?

    What the Halal Is Going On?

    Imogen Matthews , In-Cosmetics||February 2, 2017
    Demand for these beauty products is surging thanks to a fastgrowing Muslim population.

  • Relief for Sensitive Scalps

    Relief for Sensitive Scalps

    Guadalupe Pellon and Annette Mehling , BASF||February 2, 2017
    BASF researchers detail the attributes of the company’s highly effective hair care system focusing on scalp sensitivity.

  • Defining Clean Skin

    Defining Clean Skin

    Nava Dayan PhD, Dr. Nava Dayan LLC||February 1, 2017
    A look at the issues, research and history surrounding this controversial topic.