Kuwait to sell Dow Chemical's shares to the public
The decision was made to share the country's oil wealth with its citizens and impose more market discipline on companies
Kuwait will make the shares in Dow Chemicals available for purchase by the public as US petrochemicals giant announced it wll sell them off, according to a senior Kuwaiti executive, Reuters has reported.
Last week Dow Chemical announced that as part of its $7-$8.5bn divestiture plan, it would reduce its share in all of its Kuwaiti ventures, in order to make space and capital for other strategic purposes.
The US company's investments in Kuwait include a stake in EQUATE, a tie-up with the Kuwaiti government's Petrochemical Industries Co (PIC) and two other local partners, Boubyan Petrochemical Co and Qurain Petrochemical Industries Company .
EQUATE produces over 5mn tonnes of petrochemical products annually.
The shares which Dow Chemical divested would be offered to Kuwaiti citizens in initial public offers, according to the chief executive of Kuwait based PIC, Asaad al-Saad.
Consultants will be hired to assess the size of Dow Chemical's assets in Kuwait, and the U.S. firm will remain a strategic partner of PIC, he said.
Dow Chemical's other joint ventures in the country include Kuwait Olefins Co and Kuwait Styrene Co, which makes styrene monomer.
In the last several months, Kuwait's government has shown renewed interest in offering shares in state-controlled assets to the public.
In October last month sovereign wealth fund Kuwait Investment Authority said it had decided to resume selling stakes in big local firms to the public. It also said it aims to offer its stake in Kuwait Investment Co in the first half of 2015.
Dow Chemical has had a rocky relationship with PIC at times as last year it received $2.2bn in damages from PIC after an international arbitrator ruled against the Kuwaiti firm for pulling out of a planned plastics joint venture in 2008.