The Kuwait Investment Authority (KIA) might consider increasing its support for Dow Chemical Co’s disputed takeover of Rohm and Haas Co, the Financial Times reported on Tuesday.
Dow Chemical Co agreed in July to acquire rival Rohm and Haas for $15.3 billion in a bid to expand its specialty chemicals business. But last month, Dow said it would not close the deal on schedule in light of deteriorating economic conditions and the failure of a key joint venture with Kuwait -- the proceeds of which were to fund the Rohm and Haas deal.
PIC, an arm of the Kuwait Petroleum Corp, was supposed to contribute $7.5 billion to help pay for the acquisition, but the Gulf Arab state canceled the deal in December after some lawmakers voiced opposition.
Investor Warren Buffett had agreed to contribute $3 billion and the Kuwait Investment Authority was to have added $1 billion, according to a Wall Street filing in October. The KIA would consider putting up more money if there were new terms, the paper said, citing a person with knowledge of the matter.
“Today, it is very difficult to complete this deal on the old terms,” the paper quoted the person as saying. “There would have to be a new price and new terms. The environment has changed so much and chemical companies are losing so much money.” A KIA official declined to comment on the report when contacted by Reuters.
Kuwait decided in December to scrap a deal to form a $17.4 billion petrochemical joint venture with Dow Chemical, a move analysts said could deter foreign investors from moving into the world’s seventh-largest oil exporter. Rohm and Haas said on Monday its Q4 profit fell as the global economic slowdown hurt demand for its paints, coatings and electronic materials. (Reuters)