Kuwaits Pull Out Pummels Dow Chemical
The spiraling economy spins a little further south just before the New Year on news that funding for Dow Chemical Co.’s purchase of Rohm & Haas Co. fell through because Kuwait pulled out of a proposed deal. The news raises concern other companies won’t complete deals as financing disappears.
Dow Chemical’s stock plummeted following Kuwait’s decision to scrap a deal that would have provided $9 billion in cash to pay for Rohm & Haas ($7.5 billion in pretax proceeds from the sale of a 50% stake in the assets of its five global businesses to the Petrochemical Industries Corp. -- a wholly owned subsidiary of the state-owned Kuwait Petroleum Corp., plus an additional $1.5 billion in cash that both partners planned to take out of the new company.)
The Kuwaiti deal, along with the Rohm & Haas purchase, would have increased Dow's exposure to specialty chemicals from 55%, to nearly 75%, of its total business.