Rumor has it that Dow Chemical (DOW.US) is considering withdrawing from the $20 billion Saudi chemical joint venture project Saudi Aramco may become the successor

The Zhitong Finance App learned that, according to people familiar with the matter, Dow Chemical (DOW.US) is considering leaving a chemical joint venture worth up to 20 billion US dollars with Saudi Aramco. The move is part of the US company's efforts to cope with the industry's long-term downturn and accelerate the optimization and adjustment of its asset portfolio.

As of last year, Dow held 35% of the joint venture Sadara Chemical Co., with Saudi Aramco holding the rest of the shares. People familiar with the matter said that Saudi Aramco may use this opportunity to acquire Dow's shares, thereby further increasing its control over the project. Since the relevant information is still confidential, people familiar with the matter requested anonymity.

According to reports, other strategic investors or financial investors may also bid for shares held by Dow. However, relevant sources added that no final decision has been made yet, and Dow may eventually choose to keep its existing holdings.

Affected by this news, Dow's stock price once rose about 5% during pre-market trading in the US.

Dow representatives did not respond to requests for comment, and Saudi Aramco declined to comment.

Against the backdrop of years of industry downturn, Dow has been reviewing its portfolio and capital allocation with the aim of focusing on core business areas that can bring higher returns. The joint venture with Saudi Aramco is one of Dow's most important partnerships in the Middle East, and ultimately opting out will mark an important shift in the company's strategic focus in the region.

Sadara Chemical was founded in 2011 to build a comprehensive chemical complex with a total investment of over $20 billion. The complex operates 26 production units and produces more than 3 million tons of chemicals and plastic products per year.

During the investment process, Dow gradually accumulated debt exposure associated with the joint venture, including guarantees for a $500 million revolving credit line to help address possible funding shortfalls. According to Dow, Sadara Chemical withdrew 80 million US dollars from this amount in the fourth quarter of 2025.

A successful exit will hopefully reduce Dow's future exposure to potential funding requirements for this joint venture project. At the same time, Sadara Chemical remains an important part of Saudi Aramco's strategy to expand its chemical business layout and increase the added value of hydrocarbons. This direction is also highly compatible with Saudi Arabia's national goal of diversifying the economy, reducing dependence on oil, and boosting the non-oil economy.

It is worth mentioning that Saudi Aramco is also the controlling shareholder of Saudi Arabia's largest chemical company, Saudi Basic Industries Corporation (SABIC).