US Dow was wronged in failed K-Dow venture - Liveris

28 April 2011 18:10  [Source: ICIS news]

HOUSTON (ICIS)--US-based Dow Chemical was wronged when its proposed K-Dow joint venture collapsed, chief executive Andrew Liveris said on Thursday.

Dow was to form the plastics joint-venture with Kuwait's Petrochemical Industries Corp (PIC). Following the collapse of the deal, Dow entered arbitration proceedings.

Dow still expects a positive outcome from the proceedings, Liveris said during an earnings conference call.

Dow is seeking more than $2.5bn (€1.7bn) in damages, according to a regulatory filing it made in 2009.

Liveris did not say how much the company expected to recover during the conference call.

Arbitration evidence has since been submitted, and Dow expects a decision later this year, Liveris said.

"It's very clear that we were wronged, and the contracts are very clear," Liveris said. "We remain confident in our position."

The failed K-Dow joint venture dates back to December 2007, when Dow and PIC announced the agreement.

To form the joint venture, PIC would have paid $9.5bn for a 50% share in five of Dow's global businesses worth a total of approximately $19bn. Dow intended to use the proceeds from the K-Dow deal to help fund its $18.8bn acquisition of Rohm and Haas.

PIC then allegedly broke its joint-venture agreement to buy 50% of Dow's plastics business, according to a regulatory filing. Private negotiations failed to salvage the deal.

Following the collapse of the K-Dow deal, Dow missed a deadline to close on the Rohm and Haas acquisition, which later resulted in a lawsuit.

Ultimately, Dow resolved the lawsuit with Rohm and Haas, and the merger closed on 1 April 2009.

($1 = €0.68)

For more on Dow visit ICIS company intelligence

By: Al Greenwood
+1 713 525 2645

AddThis Social Bookmark Button

For the latest chemical news, data and analysis that directly impacts your business sign up for a free trial to ICIS news - the breaking online news service for the global chemical industry.

Get the facts and analysis behind the headlines from our market leading weekly magazine: sign up to a free trial to ICIS Chemical Business.

Printer Friendly