01 December 2008 20:40 [Source: ICIS news]
HOUSTON (ICIS news)--Petrochemical Industries Corp of Kuwait (PIC) will pay Dow Chemical $7.5bn (€5.9bn) to establish the K-Dow Petrochemicals joint venture (jv), $2bn less than their initial agreement, Dow said on Monday.
"This deal has closed in an economic environment that none of us has seen in our lifetimes," said Dow CEO Andrew Liveris. "Given this meltdown, it was natural for our partners and ourselves to revisit the economics of the deal."
When Dow first announced the deal in December 2007, PIC was to pay $9.5bn.
The new figure does not include a $1.5bn cash distribution that the K-Dow joint venture will pay each to Dow and to PIC.
The cash distribution would give Dow an additional $1.5bn from the joint venture - on top of the $7.5bn that the company is receiving from PIC.
In all, Dow would receive a total of $9bn once the cash distribution and PIC payment is included. The $9bn figure is closer to the earlier amount announced in December 2007.
"This is a true win for Dow and for our shareholders," Liveris said. "In this environment, cash is king".
($1 = €0.79)
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