Monday, January 12, 2009
As reported in the Times of London, Dow Chemical is seeking up to $2.5 billion in a suit filed against the government of Kuwait for breach of contract. Dow claims entitlement to the damages after Kuwait pulled out of a planned $17.4 billion joint venture. Forbes describes the $2.5 billion as a "break up fee" included in the agreement that set up the joint venture. Dow CEO Andrew Liveris, whose job may be on the line according to Forbes, explains the lawsuit in this interview with the Wall Street Journal. Clearly, the stakes are high, as Dow depends on its business relationships in the region but is also in need of the cash it was expecting this deal to generate so that it could pursue its other business objectives.