By SAABIRA CHAUDHURI
Dow Chemical 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 CEO 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.
Dow Jones Newswires