Canadian court orders Nova Chemicals to pay Dow CAD$1.6 billion

MIDLAND, Mich. - The Court of King’s Bench of Alberta has ordered NOVA Chemicals Corporation to pay Dow (NYSE: DOW) CAD$1.620 billion (approximately USD$1.2 billion) in additional damages, according to a judgment signed Tuesday. The settlement comes as a positive development for Dow, which currently has a market capitalization of $21.7 billion and has seen its stock rise 8.56% over the past week.

The ruling relates to losses Dow incurred from a jointly owned ethylene asset in Joffre, Alberta. The award includes interest calculated to April 7, with payment expected in the fourth quarter of 2025.

This judgment follows a previous CAD$1.43 billion (approximately USD$1.08 billion) payment NOVA made to Dow in 2019, stemming from a June 2018 decision. That earlier ruling found NOVA had failed to operate the jointly owned facility at full capacity and breached contractual obligations since 2001, resulting in reduced ethylene supply to Dow.

On appeal, the court had directed recalculation of Dow’s damages for the period from 2001 through 2012, as well as quantification for 2013 through June 2018.

The latest judgment is subject to appeal, according to the press release statement.

Dow, headquartered in Midland, Michigan, operates manufacturing sites in 30 countries with approximately 36,000 employees and reported sales of approximately $43 billion in 2024. The company’s detailed financial health analysis and comprehensive research report are available through InvestingPro, offering investors deeper insights into this prominent player in the chemicals industry.

In other recent news, Dow Inc. reported its first-quarter 2025 financial results, revealing a slight miss on earnings per share (EPS) with $0.02 compared to the expected $0.03. However, the company exceeded revenue expectations, reporting $10.4 billion against the forecast of $10.28 billion. Dow also announced the divestiture of its 50% stake in DowAksa Advanced Composites Holdings BV to Aksa Akrilik Kimya Sanayii A.Ş. for $125 million, a move that aligns with its strategy to focus on core businesses. Barclays analyst Michael Leithead reduced Dow’s stock price target from $38 to $32, maintaining an Equalweight rating, reflecting cautious investor sentiment regarding the company’s earnings stability. Dow is implementing strategic measures to enhance financial flexibility, including cost-cutting initiatives expected to save $1 billion by 2026. The company is also exploring potential asset sales to improve liquidity. These developments come amid persistent global demand challenges, particularly in Europe and China, affecting Dow’s key sectors such as automotive and housing. Despite the challenges, Dow remains committed to investing in growth areas and maintaining shareholder returns.

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