Dow considers exit from $20 billion Saudi Aramco chemicals venture Sadara

Dow Inc is considering a potential exit from its US$20 billion chemicals partnership with Saudi Aramco, Bloomberg News reported, citing people familiar with the matter, as the US chemicals maker reviews its portfolio and capital allocation amid a prolonged industry downturn.

Dow held a 35% stake in Sadara Chemical Co. as of last year, while Aramco owns the remaining interest, according to people familiar with the matter. Aramco could potentially acquire Dow’s stake, although other strategic or financial investors may also bid for the holding, they said.

No final decision has been made, and Dow could ultimately decide against pursuing a transaction, the people said. They asked not to be identified because the discussions are confidential.

Dow shares rose about 3.7% in US pre-market trading following the report. Representatives for Dow did not respond to requests for comment, while Aramco declined to comment.

Portfolio reshaping amid industry downturn

Dow has been reviewing its portfolio and capital allocation as it seeks to focus on businesses that it believes can generate higher returns. The chemicals industry has been facing a prolonged downturn, prompting companies to reassess investments and capital spending.

An exit from Sadara would represent a significant shift in Dow’s Middle East strategy, given the venture’s importance to the company’s regional operations.

Sadara was established in 2011 to develop an integrated chemicals complex in Saudi Arabia with total investment of more than US$20 billion. The venture operates 26 manufacturing units and produces more than 3 million metric tons of chemicals and plastics annually.

Aramco could increase chemicals exposure

For Aramco, a potential acquisition of Dow’s stake would offer an opportunity to increase its ownership of a major chemicals operation. Sadara is an important part of the oil giant’s strategy to expand in chemicals and extract greater value from hydrocarbons.

The potential transaction would also fit Saudi Arabia’s broader efforts to diversify income away from oil and expand its non-oil economy. Aramco is already a controlling shareholder in Sabic, Saudi Arabia’s largest chemical producer, giving it a significant position in the global chemicals sector.

Debt exposure adds to Dow’s considerations

Dow has also built exposure to Sadara’s debt through its investment in the venture. The company guarantees a US$500 million revolving credit facility designed to help finance its share of potential funding shortfalls.

Sadara drew US$80 million from the facility in the fourth quarter of 2025, according to Dow.

An exit could help Dow reduce its exposure to future funding requirements while freeing up capital as it continues to reshape its portfolio. For Aramco, meanwhile, greater ownership of Sadara could strengthen its push to expand its chemicals business and capture more value from Saudi Arabia’s hydrocarbon resources.