Dow Chemical Co. announced Monday that it has purchased more than 2 percent of the outstanding shares of Montedison SpA common stock.

A Dow spokeswoman would not stipulate the company's share of Montedison stock, but said that it will not file a form 13D with the Securities & Exchange Commission, required when purchasing 5 percent of a company's stock. Montedison has about 2.1 billion outstanding shares of stock, which

closed Monday in Milan at 1,565 lira (about $1.26) a share.Dow is filing notice with the Italian National Commission for Stock Exchange, Consob, which is required whenever an investor acquires more than 2 percent of a public company's share capital.

Dow has purchased the shares as part of the corporation's ongoing investment portfolio and cited an excellent opportunity, she said. Dow has been active in the Italian chemical industry for 25 years and has assets in Italy of $650 million, generating domestic Italian sales of $800 million.

The spokeswoman said the investment was made based on several key factors:

* Montedison is a well-managed company with a strong position and performance.

* Montedison stock has an undervalued market position, and during recent weeks has been selling below its book value.

* The proposed realignment of Montedison's non-strategic assets, if successfully concluded, could have the potential for strengthening its balance sheet.

* The European chemical industry is well-positioned. Its strong earnings and good margins are based on a favorable supply/demand balance, as well as a more stable dollar and stable feedstock costs. Growth in Italy has been higher than the European average.

* It is well-known that the Italian chemical industry is discussing restructuring proposals with the government. Dow believes that this will result in a more focused and efficient chemical industry. A Montedison spokeswoman said that the company considered it significant that Dow has such a highly positive evaluation of the company.