Dow Electronics will dispose of its electron manufacturing business.
Dow Electronics announced in a regulatory filing Monday that it would dispose of the manufacturing business and a related facility it had established in Germany, including the electrical-power manufacturing unit.
Dow said in the filing that it was closing the German facility.
Dow had operated the German manufacturing business since the late 1970s.
The company’s electric-power division, which had produced batteries for the grid for years, had been acquired by Tesla, the California-based electric-car company.
The new announcement came a day after the company announced a $7.9 billion investment in its electric-vehicle division.
Dow also said it would expand its solar-power unit to include the installation of new rooftop panels, and that it will expand its electric vehicle battery business, too.
The electric-grid business is Dow’s largest, with an estimated 1.4 million solar panels installed nationwide, according to Dow.
The Dow deal comes as the company has been under scrutiny for not meeting deadlines in a contract to provide solar panels to electric-cars makers.
Dow is in the process of negotiating a new contract with the U.S. Department of Energy for solar panels, but the deadline is now Oct. 18.
The U.N. agency has also asked Dow to ensure that it is meeting its commitments to the renewable-energy standards under which it sells electricity to its customers.
Dow, which has been in the electric-fuel business since 1979, said in a statement that the deal with Tesla “significantly improves our long-term business.”
Dow said it is making a $4.2 billion payment to the DOE to cover the loss of the German battery business.
The DOE’s Green Technology Center is part of the DOE’s national research and development organization.
Dow has been a long-time customer of the center, which is also responsible for designing new nuclear reactors and nuclear waste facilities.
The German unit has been at the center of several investigations into whether Dow has broken environmental and safety regulations.
In 2016, Dow and its German unit agreed to pay $3.4 billion to settle a federal environmental investigation.
In June 2017, Dow agreed to $4 billion in penalties to resolve a lawsuit over the environmental impact of its solar panels.
The deal with the DOE was announced as the Dow-Tesla deal was coming under scrutiny after Tesla CEO Elon Musk, who is a Trump administration adviser, said last month that he would consider buying the business.
Dow’s German unit will remain with Dow, the company said.
Dow will pay $2.5 billion in cash and stock to buy Tesla.
Dow was looking to sell its electric vehicles business, which it had operated since 1976, but it has been working on a way to save the business by selling the German solar business.