Dow Chemical Co., in a move it "doesn't take lightly," will
pursue legal action after a surprising decision by the Kuwaiti Supreme Petroleum Council. On Dec. 28, the council withdrew its earlier approval of Dow's joint venture with Kuwait Petrochemical Industries Co.
It's no wonder Dow was "shocked by the news," since it has been doing deals in Kuwait for over a decade and was prepared for Day 1 of K-Dow Petrochemicals to take place on Jan. 2.
Along with reiterating its corporate strategy and promising uninterrupted dividends, Dow said it had previously discussed a deal with other potential partners and has already been approached by other interested parties about a deal for the basic plastics businesses at the heart of the K-Dow deal.
In its statement the Midland, Mich., company said:
Dow believes that the identification of an alternative joint venture partner for Dow's basic plastics business combined with the acceleration of planned divestitures and several additional divestments that are consistent with the Company's strategy will yield proceeds greater than the funds Dow expected to receive in connection with the K-Dow joint venture.
The AP, citing Securities and Exchange Commission filings, said
Dow could potentially recoup $2.5 billion from PIC for backing away from the K-Dow Petrochemicals venture.
As has been widely noted, the $9 billion in proceeds Dow expected from the K-Dow deal figured prominently in its ability to manage its pending $15.4 billion purchase of Rohm and Haas Co. while protecting its credit rating and dividend.
On Monday, Bloomberg reported on speculation that Dow would try to
negotiate a lower price for Rohm and Haas. -
Baz HiralalSee the announcement from Dow ChemicalGo to the AP story
Join Corporate Dealmaker's LinkedIn forum
Juergen Lasowski
And the winners are...
