Dow Chemical Co has announced its decision to separate a portion of its chlorine business, which is quite old, and sell it to Olin Corp in a deal worth US$5 billion.

The decision is seen as yet another attempt by the company to shed low-margin assets.

After the completion of the deal, Olin will become the world's largest producer of chlor-alkali.

The company is used to make chlorine and caustic soda, which are used in a variety of industries such as healthcare, textiles and automotive.

Dow had been under intense pressure from activist investor Dan Loeb to break itself up and the company announced in 2013 its plans to sell a bulk of its chlorine operations.

In November 2014, the company managed to avert a proxy fight with Loeb by agreeing to add four independent directors to its board.

Dow is now focusing more on profitable businesses such as packaging, electronics and agriculture.

Dow Chief Executive Andrew Liveris has expressed hope that the company would seal more such deals deals over the next 12 months as it would help the company in simplifying its joint ventures.