26 January 2009 16:28 [Source: ICIS news]
Releads on Dow statement, adds detail throughout
HOUSTON (ICIS news)--US major Dow Chemical confirmed on Monday that it would miss another deadline to close its $18.8bn (€14.5bn) merger with Rohm and Haas, attributing the failure to the global credit crisis and its failed joint venture with Petrochemical Industries Co (PIC) of Kuwait.
Had the joint venture with PIC closed, Dow would have received $7.5bn from PIC and a $1.5bn cash distribution from the resulting joint venture, K-Dow Petrochemicals.
Once it had failed Dow said it aggressively considered other ways to close the deal.
However, Dow was also contending with the crises in the world's financial and credit markets, the company said. At the same time, chemical demand crashed during the fourth quarter, bringing operating rates to historic lows in December.
Dow, in fact, announced massive job cuts and plant closures in December.
"The world has changed significantly, and we still do not see the bottom of this unprecedented demand destruction which only accelerated through the fourth quarter," according to a statement issued by Andrew Liveris, Dow CEO.
As such, Dow said in a statement that ""recent events have made the closing untenable at this time".
In a statement, Rohm and Haas said that it intended "to pursue all available alternatives to protect its shareholders' interests".
This was the second deadline that Dow has missed.
Earlier, the company missed a 10 January deadline to close the deal. For each day beyond the deadline, Dow will owe Rohm and Haas $3.35m.
($1 = €0.77)
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