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Dow Selling Superabsorbent Business

Ownership of a plant in Rheinmunster, Germany, will transfer to Degussa.
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Dow Chemical (DOW) - Get Free Report agreed to sell its superabsorbent products business to Degussa AG.

Terms weren't disclosed. The transaction also includes a long-term agreement to supply a substantial volume of glacial acrylic acid to Degussa, with opportunities for future growth in volume over time.

"It was becoming increasingly difficult to justify the product and process research investments needed to satisfy large, global Superabsorbent Products customers," said Ted Cosse, business vice president, acrylics, solvents, and intermediates. "After a good deal of analysis, it became clear that the hurdles we faced in trying to attain a global leadership position in Superabsorbent Products were too great to overcome."

Ownership of Dow's superabsorbent products plant in Rheinmunster, Germany, will transfer to Degussa as part of this transaction. Dow will retain ownership of the Midland, Michigan plant where Dow will contract manufacture Superabsorbent Products for Degussa, ending in the first quarter 2007. Dow will continue to evaluate its alternatives concerning the Midland facility.

"Through the long-term agreement to supply glacial acrylic acid to Degussa, Dow will continue to be one of the world's largest manufacturers of acrylic acid and esters. We are committed to maintaining a strong position in acrylic acid and esters to support our world-leading emulsions business and strategic merchant customers," added Cosse.

Acrylic acid and acrylic esters are key components used to produce numerous materials such as emulsion polymers and superabsorbent polymers. Emulsion polymers are used in the manufacture of paint, paper, and carpet. Superabsorbent polymers provide the absorbency essential to products such as disposable baby diapers.