NEW YORK — A year-end surprise has left the nation’s largest chemical company scrambling to salvage a deal it had hoped would make riding out a recession a little easier.
Following the collapse of a $17.4 billion joint venture with a state-owned Kuwaiti company, Dow Chemical must weigh taking on more debt than it wanted, entering intense negotiations to restructure a buyout of rival Rohm & Haas or both.
Shares of Rohm & Haas soared by the greatest amount in two months Tuesday, signifying pressure on Dow to complete the deal.
And if Dow delays a decision, it could lose money.
Under an agreement signed with the Philadelphia-based specialty-chemicals maker, the original buyout price of $78 per share will rise each day that Dow fails to sign off on the deal after Jan. 10.
Dow agreed to pay a 74 percent premium for Rohm & Haas during a summer when all chemical makers were burdened by unprecedented costs for energy and carbon-based feedstocks.
That environment has changed radically. Energy prices have tumbled, and the global economy has deteriorated badly, two reasons given by Kuwait to dump its agreement with Dow late Sunday.
Dow had expected more than $7 billion in cash from the joint venture. The Associated Press
