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 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)
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