Dow Chemical (NYSE:DOW) closed up 2.36 percent at $39.98 per share on December 2. Shares rose after the company announced the details of a plan to “carve out” approximately $5 billion worth (of annual revenues) of its low-margin commodity chemicals business.
“Today’s announcement represents a continuation of the shift of our company toward downstream high-margin products and technologies that customers value, and generate consistently higher returns than cyclical commodity products,” said Chair and CEO Andrew Liveris in a statement. “These businesses have served us well over decades, but are serving markets that Dow has exited over time, and we are therefore right-sizing our upstream integration to match the downstream focus that we started a decade ago.”
The announcement comes as executives discuss the possibility of removing the word “Chemical” from the company name entirely. In an interview with the Wall Street Journal, Liveris suggested that the various components of the Dow of the future would be connected by “chemistry rather than chemicals.” The company has already flirted with the idea, marketing the solo “Dow” brand during the London Olympics.