Dow awarded $2.16 billion from Kuwait over aborted 2008 deal

Dow Chemical Co., the largest U.S. chemical maker by sales, said an arbitration panel ruled that Kuwait must pay $2.16 billion in damages after it canceled a 2008 agreement to buy a stake in the company’s plastics business.

The award by the International Court of Arbitration of the London-based International Chamber of Commerce doesn’t include costs or interest and is final and binding, Midland, Michigan- based Dow said today in a statement.

Kuwait’s Petrochemical Industries Co., under pressure from lawmakers, canceled a contract to form a 50-50 venture with Dow’s plastics unit in December 2008. The failure of the so- called K-Dow venture deprived Dow of a $9 billion payment during the global financial crisis and nearly derailed its 2009 purchase of Rohm & Haas Co. Dow cut its dividend by 64 percent in February 2009, the first reduction in company history, as it struggled to complete the Rohm & Haas deal.

Petrochemical Industries was to have paid $7.5 billion for its stake in the venture, and the venture was to have paid each partner $1.5 billion.

“We remain focused on continuing to move forward with our transformation and profitable business partnerships -– both in Kuwait and around the world,” Dow Chairman and Chief Executive Officer Andrew Liveris said in the statement.

Dow rose 3.7 percent to $31.65 at 9:02 a.m. in New York before the start of regular trading.