Monday January 26, 03:34 PM
Dow nixes big takeover plan for Rohm & Haas
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NEW YORK (AFP) - Dow Chemical (NYSE: DOW - news) said Monday it could not meet a deadline for an 18.8 billion dollar takeover of rival Rohm & Haas, citing "unacceptable uncertainties" on financing after a Kuwaiti partner scrapped a joint venture.
Dow said it was unable to meet the Tuesday deadline for the deal, which would have created the world's leading specialty chemicals and materials company.
"Dow has determined that recent material developments have created unacceptable uncertainties on the funding and economics of the combined enterprise," the Michigan firm said in a statement.
"This assessment is based on several macroeconomic factors such as the continued crisis in global financial and credit markets combined with the dramatic and stunning failure of Petrochemicals Industries Company (PIC) of Kuwait to fulfill its obligation to complete the formation of the K-Dow joint venture in late December 2008."
The state-owned Kuwaiti group last month scrapped a 17.4-billion-dollar deal to create a petrochemicals joint venture.
Rohm & Haas said in a statement that "it intends to pursue all available alternatives to protect its shareholders' interests," without elaborating.
Under the Kuwaiti deal, PIC was to pay 7.5 billion dollars to form a petrochemicals firm known as K-Dow, providing Dow the cash to help complete the Rohm & Haas deal.
Dow chairman and chief executive Andrew Liveris said his firm still hopes to work out a deal to acquire Rohm & Haas.
"Our long-term strategy remains unchanged and the proposed acquisition of Rohm and Haas is consistent with this strategy," he said.
"Since Dow learned in late December of PIC's failure to close the K-Dow transaction, Dow has been aggressively engaged on multiple paths seeking ways to enable the Rohm and Haas transaction. Dow remains interested in discussions to find a solution to complete the acquisition of Rohm and Haas, but recent events have made closing untenable at this time."
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