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UPDATE 1-Arkema posts Q2 net loss, to buy some Dow assets

Published 08/03/2009, 01:51 AM
Updated 08/03/2009, 01:56 AM

* Posts Q2 loss, raises cost savings goal

* To buy some Dow Chemical assets

* Deal to be accretive for Dow Chemical shareholders

(Adds Dow Chemical deal, detail, background)

PARIS, Aug 3 (Reuters) - French chemicals maker Arkema posted a second-quarter net loss on Monday, raised its cost-savings target and said it would buy some assets of larger rival Dow Chemical.

Arkema said it would acquire an acrylic acid and esters plant and a specialty latex business off Dow Chemical for a fair value consideration of $50 million.

"This acquisition is fully in line with our commitment to develop our best product lines and boost our downstream integration," Arkema Chief Executive Thierry Le Henaff said in a statement.

For Dow Chemical, the deal marks part of the company's plans to deleverage and sell non-core assets. Dow Chemical added that the sale would be accretive for its shareholders.

COST SAVINGS

Arkema made a net loss of 114 million euros ($161 million), compared with a net profit of 60 million a year earlier. Arkema's loss echoed that of rival Rhodia, which last month posted a second-quarter net loss of 40 million euros.

Arkema's earnings were hit by the cost of restructuring, which has resulted in hundreds of job cuts in recent months.

Arkema also raised its cost-savings target on Monday, setting itself a new goal of achieving 600 million euros in savings for the period from 2006 to 2010, from a previous target of 550 million euros.

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Arkema shares closed up 5.7 percent at 20.12 euros on Friday, giving the company a market capitalisation of around 1.2 billion euros. The stock has risen 64 percent so far this year, having fallen 73 percent last year.

Dow Chemical shares closed down 1.7 percent at $21.17, giving the group a market capitalisation of around $23 billion. ($1=.7085 Euro) (Reporting by Sudip Kar-Gupta; editing by Will Waterman and Simon Jessop)

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