By Matt Scotland
Recent withdrawal by Kuwait’s PIC forces Dow to act.
In response to the sudden back down of the multi-billion joint venture between Dow Chemical and Kuwait’s Petrochemical Industries Company (PIC), Dow has reacted by stating it aims to fulfill transformational corporate strategy Dow has pursued since 2005. As part of this strategy, it will implement a wide range of legal, operational and financial actions to ensure it meets its goals.
Dow was informed at the end of December that the closing of the deal would be postponed as the Kuwaiti Supreme Petroleum Council had withdrawn its approval of the transaction. The abandonment of the terms has left Dow and its chairman and CEO, Andrew Liveris, disappointed and surprised.
"While the events of the past week have been extremely disappointing and completely unexpected given where we were in the approval process, Dow is and will continue to be a strong, globally diverse company with a wide range of options available to us for delivering on our strategy,” said Liveris.
“It is certainly true that the actions in Kuwait have accelerated the need for decisive action but our strategy remains as relevant as ever and will drive the choices we make to become a company that will thrive in the changing markets of the 21st century."
Dow are now said to be looking at taking legal action against PIC under terms of various agreements and the JVFA executed by Dow and PIC since the JV was announced in December 2007.
"Pursuing legal options is not a decision we take lightly, especially because of the longstanding partnerships we have established in Kuwait over the past decade, but PIC is in breach of contract, and we must take action to protect the interests of our company and our shareholders," said Liveris.