Monday, January 09, 2012

Is the End Near for the Dow-Kuwaiti JV Disaster?

One more post on Dow, since this is an update on a story that I commented on quite a bit (1, 2, 3, 4) when it originally happened.

As you may recall, back in 2008, Dow attempted to form a joint venture with Kuwaiti's Petrochemicals Industries Co (PIC), with the PIC paying Dow $9 billion for some capital assets as part of the deal. The Kuwaiti firm originally thought they had the money, but as oil prices fell that year, they came up short so they cancelled the deal. This really hurt Dow as Dow was already planning on using that money to help purchase Rohm & Haas. Dow was able to complete their purchase by selling other assets, but has since sued PIC for damages that apparently were specified in the original agreement. Dow is stating that they are "confident" that they will soon be rewarded $2.5 billion. We shall see. Knowing only what I've read, it seems like they should be owed something, but the law has a funny way of distorting justice and reality.

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