Dow Weighs Exit From $20 Billion Sadara Joint Venture

Dow Inc. is exploring a departure from its 35% equity stake in Sadara Chemical Co., its $20 billion joint venture with Saudi Arabian Oil Co., as part of a broader corporate portfolio overhaul.

According to a Bloomberg report cited by Investing.com, deliberations remain preliminary, and no final decisions have been reached regarding whether the chemical manufacturer will divest its holding in the partnership.

Scale and Operations at Jubail

The Sadara joint venture represents one of the largest petrochemical complexes ever built in a single phase. Located in the industrial city of Jubail, Saudi Arabia, the manufacturing footprint encompasses 26 integrated production units with an annual output exceeding 3 million metric tons of chemical products and specialized plastics.

Operations at the Jubail facility faced external headwinds earlier in the year when regional supply chain disruptions linked to Middle East conflicts forced a temporary production shutdown. Those operational halts intensified financial strains across the venture during a prolonged cyclical downturn in global chemical markets.

Negative Investment Balance and Accounting

Financial disclosures highlight the pressure the partnership has placed on Dow's balance sheet. According to financial filings outlined by Investing.com, Dow reported a negative investment balance of $793 million in Sadara Chemical Co. as of June 30.

Because cumulative losses had driven the carrying value below zero, Dow suspended the recognition of further losses from the venture during the first quarter of 2026. This accounting maneuver limited additional earnings bleed on the parent company's financial statements while negotiations and portfolio reviews progressed.

Potential Buyers and Restructuring Context

Saudi Aramco, which owns the remaining 65% majority stake in the partnership, stands as the logical buyer to absorb Dow's 35% share. However, market observers note that other strategic operators or private equity investors could evaluate bids for the asset depending on valuation terms and long-term feedstock supply agreements.

The potential exit aligns with Dow's strategy to streamline its asset base, shed capital-intensive joint ventures, and refocus on core domestic and specialized chemical operations amid sluggish global demand and elevated operating costs.