By Dow Jones Business News, March 04, 2013, 11:15:00 AM EDT
Dow Chemical Co. ( DOW ) has been awarded an additional $318 million in an arbitration case with Petrochemical
Industries Co. of Kuwait.
The additional award is tied to a dispute over a scuttled multibillion-dollar joint venture in 2008 that almost
derailed the chemical company's efforts to complete a huge acquisition.
The award, from the International Court of Arbitration of the International Chamber of Commerce, brings the total
amount Dow Chemical has been awarded to $2.48 billion and is the last step in the disciplined arbitration process,
bringing the process to an end. The partial award of $2.16 billion was announced last May.
"Payment of these damages of nearly $2.5 billion will allow Dow to accelerate its priority uses for cash by further
strengthening our balance sheet," Dow Chief Executive Andrew N. Liveris said. "Dow and Kuwait share a long history and
strong partnership, and this award ruling brings suitable closure to the arbitration process."
In December 2008, Dow said Kuwaiti officials informed it the Persian Gulf country was scrapping a deal under which the
state-owned petroleum company was to pay Dow Chemical$7.5 billion for a 50% stake in several chemical plants. Dow
intended to use that money to help finance its $15.3 billion purchase of Rohm & Haas Co., which makes coatings and
electronic materials.
The decision--by Kuwait's top petroleum-policy council to bail out came amid fears that plunging oil prices had made
the deal less attractive--came less than a week before the deal was to become effective. Both Dow and the Kuwaiti
company were also planning to collect $1.5 billion apiece from the joint venture, known as K-Dow Petrochemicals.
Earlier that same month, Dow Chemical had renegotiated the deal and agreed to accept a total of $9 billion, including
the money it was to get from K-Dow, about $500 million less than it originally planned.
Shares of Dow closed Friday at $31.81 and were inactive premarket. The stock has fallen 7% in the past 12 months.
--Jeffrey Ball and Chip Cummins contributed to this report.
Write to Saabira Chaudhuri at saabira.chaudhuri@dowjones.com.
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03-04-131115ET
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