Dow to shut down three European assets amid regional challenges

MIDLAND, Mich. - Dow Inc. (NYSE:DOW), a prominent player in the chemicals industry with a market capitalization of $20.1 billion, announced Monday its board has approved the shutdown of three upstream assets in Europe as part of efforts to improve profitability in the region. According to InvestingPro data, the company currently trades below its Fair Value, suggesting potential upside for investors willing to wait out the restructuring.

The chemical company will close its ethylene cracker in Böhlen, Germany, chlor-alkali and vinyl assets in Schkopau, Germany, and a basics siloxanes plant in Barry, U.K. The shutdowns are scheduled to begin in mid-2026 and be completed by the end of 2027. The move comes as Dow manages a total debt burden of $17.9 billion, with a debt-to-equity ratio of 1.07.

The actions build on Dow’s initial announcement in April 2025 regarding European asset rationalization. The company cited difficult market dynamics and challenging cost and demand conditions in Europe as driving factors.

Approximately 800 Dow roles will be affected by these closures, in addition to the 1,500 positions being eliminated globally as part of the $1 billion cost savings initiative announced in January.

"Over the past decade, we have demonstrated Dow’s commitment to operating with a best-owner mindset by taking proactive actions across higher-cost or non-strategic assets," said Jim Fitterling, Dow chair and CEO, in the press release.

The company expects the shutdowns to result in Operating EBITDA improvements beginning in 2026, reaching 50% of the targeted $200 million by year-end 2027 and full delivery by 2029. The plan involves a cash outlay of approximately $500 million over four years.

Dow will record charges between $630 million and $790 million related to these actions, covering asset write-downs, exit costs, and severance benefits.

The company stated the shutdowns will "right-size regional capacity, reduce merchant sale exposure, and remove higher-cost, energy-intensive portions" of its European portfolio to better serve profitable derivative demand. Despite current challenges reflected in its gross profit margin of 9.56%, Dow maintains a significant dividend yield of 9.84%. Get deeper insights into Dow’s financial health and access exclusive analysis with InvestingPro, which offers comprehensive research reports and additional ProTips for informed investment decisions.

In other recent news, Dow Inc. has been ordered by a Canadian court to receive CAD$1.620 billion (approximately USD$1.2 billion) from NOVA Chemicals Corporation. This judgment is related to losses from a jointly owned ethylene asset and follows a previous payment of CAD$1.43 billion in 2019. In terms of earnings, Mizuho has lowered its EBITDA estimate for Dow’s second quarter to $797 million, down from an earlier forecast of $948 million, and reduced its full-year projection to $3.8 billion. BMO Capital has downgraded Dow from Market Perform to Underperform, citing weak market conditions that may affect the company’s second-quarter EBITDA performance. Barclays also reduced Dow’s stock price target to $32 from $38, maintaining an Equalweight rating, highlighting the company’s strategic financial measures amidst economic challenges.

Additionally, Dow has agreed to sell its 50% stake in DowAksa Advanced Composites Holdings BV to its joint venture partner, Aksa Akrilik, for $125 million. This divestiture aligns with Dow’s strategy to focus on its core businesses. Mizuho has lowered Dow’s stock price target to $31 due to ongoing weakness in polyethylene pricing, impacting Dow’s financial performance. These developments reflect broader challenges in the chemicals sector, affecting Dow’s operations and financial outlook.

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