Billionaire Daniel Loeb, whose hedge fund Third Point said on Tuesday it acquired a significant stake in the Dow Chemical Co., called on Dow to spin off its petrochemicals division. In a Third Point quarterly investor letter, the firm said it would “best serve shareholders’ interests” if Dow commissioned a third-party review to assess whether or not its current petrochemicals strategy aligns with its goals and maximizes profitability.
Dow has recently undertaken an effort to evolve into a specialty chemicals company and migrate its petrochemical operations downstream. Third Point asserted the strategy is “misaligned” with the trend of higher upstream margins in North America. It pointed to Dow’s recently announced chlorine value chain asset carve-out as a model for establishing a stand-alone company encompassing its petrochemical businesses. A Dow spokeswoman told FuelFix the company welcomes “constructive input” and that its investments have and will continue to deliver value to shareholders.