Dow Chemical failed to close the transaction on the agreed date citing unacceptable funding uncertainties.
Lawsuit to enforce deal
Rohm & Haas quickly responded filling legal papers in an attempt to force Dow to go ahead with the $15.3bn deal, signed in July last year.
Dow’s chief executive Andrew Liveris had hailed the Rohm & Haas acquisition as ‘game-changing’ in July but recent events have put the future of the acquisition in jeopardy.
The loss of a $17.4bn joint venture with Kuwait’s state-run Petrochemical Industries Company (PIC) last month put Dow’s financial capacity to complete the Rohm & Haas deal in doubt.
In a statement released yesterday, Dow said the failure of PIC to fulfill its obligations was ‘dramatic and stunning’.
However, the Kuwait affair is not the only stumbling block. The crisis in global financial and credit markets has hindered Dow’s ability to raise the necessary funds.
'Unprecedented demand destruction'
Liveris also admitted that the company was suffering from an unprecedented drop in demand for its chemical products.
He said: “The world has changed significantly and we still do not see the bottom of this unprecedented demand destruction which only accelerated through the fourth quarter and brought December operating rates to historic lows.”
Nevertheless, Dow remains interested in discussions to find a means of completing the acquisition of Rohm & Haas and said it had ‘aggressively engaged on multiple paths’ to complete the transaction before the deadline.
The trial requested by Rohm & Hass is scheduled to begin on March, 9, in Delaware and is expected to be completed within a week.