MIDLAND, MICH. (May 24, 10:55 a.m. ET) — Dow Chemical Co. has been awarded $2.16 billion in an arbitration case connected to its attempt to sell its commodity plastics business to Petrochemical Industries Co. of Kuwait in 2008.
The International Court of Arbitration in
“This outcome brings resolution and closure to the issue,” Dow Chairman and CEO Andrew Liveris said in a May 24 news release.
State-owned PIC had planned to buy half of Dow's polyethylene, polypropylene and polycarbonate businesses – as well as related assets – for about $8.5 billion. But the economic recession that hit global markets during 2008 reduced the value of the assets that Dow was trying to sell. That decline led Kuwaiti lawmakers to convince government officials in December 2008 that the deal “was no longer viable, given the global economic downturn.”
Since that point, major North American natural gas discoveries have increased the value and profitability of Dow's PE assets. The firm later sold its PP business to Braskem SA.
Dow spokesperson Kasey Anderson said that the firm hasn't factored the $2.16 billion into its current finances. She added that the settlement “will further enhance [Dow's] financial flexibility.”
Dow ranks as one of the world's largest plastics and chemicals makers. The firm posted sales of almost $60 billion in 2011.