Both sides seem to have been able to kiss and make up. And their still closing at $78 a share. And Wall Street seems to be happy about it too. Today. But since they always have a "what have you done for me lately" (i.e., in the last quarter) prospective, I don't think the long term perspective will be as rosy.
It's ironic that Dow is able to progress on this by selling assets since it was by attempting to sell assets to the Kuwaitis that they got themselves into this pickle. They're obviously believing that selling this set of plants and equipment will proceed a little bit smoother. And they're cutting jobs too.
The New York Times has an excellent look at all the details of this deal by someone with much more information than I can gather by just reading news articles.