Dow Considers Divesting Stake in Saudi Arabia's $20 Billion Sadara Chemical Venture

US chemicals giant Dow is evaluating a potential exit from its 35% interest in the Sadara Chemical Company, a significant petrochemical joint venture with Saudi Aramco. The move comes as the global chemicals sector faces prolonged challenges including weak demand, overcapacity, and rising costs, exacerbated by regional geopolitical tensions.

Potential Sale and Buyers

Bloomberg reports that Dow is considering selling its share in the $20 billion mega-project, with Saudi Aramco identified as a potential buyer. Other strategic and financial investors may also express interest, although no final decision has been reached by Dow.

Sadara Chemical Company Overview

Located in Saudi Arabia's Jubail Industrial City, Sadara was developed as the world's largest integrated chemicals complex built in a single phase. Its 26 manufacturing plants have an annual production capacity exceeding 3 million metric tons of performance plastics and high-value chemicals. The facility experienced a temporary shutdown earlier this year due to supply chain disruptions linked to regional conflicts.

Dow's Strategic Review

For Dow, a sale would align with its broader strategy to streamline its portfolio and enhance profitability. The company announced plans in January to reduce its global workforce by approximately 13%. As of June 30, Dow reported a negative investment balance of $793 million in Sadara and has suspended recognition of losses from the venture starting in the first quarter of 2026.

Implications for Aramco

A potential acquisition of Dow's stake would offer Saudi Aramco an opportunity to consolidate its ownership in one of Saudi Arabia's most substantial petrochemical assets. This occurs as Dow faces increasing pressure to cut costs and strengthen its financial position.