UPDATE: Dow To Seek More Than $2.5B for Failed Kuwait Deal
January 06, 2009
Dow Chemical Co, the largest US chemical maker, said Tuesday it plans to seek more than 2.5 billion dollars in damages from Kuwait for cancelling a joint venture just days before its launch.
A 17.4-billion-dollar deal between Kuwait's state-run Petrochemical Industries Co (PIC) and Dow fell through on December 28. The joint venture would have enabled Dow to acquire rival Rohm & Haas, the world's largest maker of acrylic paint ingredients. Dow would have gained about 7.5 billion dollars after taxes from Kuwait's investment.
PIC was to buy a 50-percent stake in Dow's commodity plastics unit. The agreement failed amid opposition from Kuwaiti parliamentarians who claimed it was overpriced.
PIC chairman Maha Mulla Hussein said Kuwait had not breached any contract. "The action we did is according to the agreement," he told Bloomberg financial news agency.
Dow is to seek damages from Kuwait in court as well as in the International Chamber of Commerce in London, which will not be limited to the 2.5-billion-dollar termination fee, Dow CEO Andrew Liveris said.
"We are seeking multiple billions of dollars in remedy and we will pursue all legal options to get that ... There is a breach of a commercial contract," Liveris told Bloomberg.
Dow, which is considering new partners for its plastics unit, said it was open to going ahead with the joint venture if Kuwait reversed its decision.
Source: Deutsche Presse-Agentur (dpa)
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