|Dow Chemical Co. headquarters in Midland, Mich. Photo © Dow Chemical.|
Dow Chemical Co. has received a $2.2 billion payment from Kuwaiti-owned Petrochemical Industries Co. (PIC), settling a lengthy legal dispute over the failed K-Dow joint venture.
K-Dow, which was reportedly worth $17.4 billion, was scrapped in December 2008 following widespread criticism in Kuwait that the venture was a waste of public funds. In response, PIC backed off the deal, under which the state-owned petroleum company had to pay $7.5 billion for a 50 percent stake in several chemical plants.
After filing legal proceedings against PIC, Dow Chemical was awarded $2.16 billion in May 2012 and a further $318 million in March 2013 from the International Court of Arbitration of the International Chamber of Commerce, which brings the total amount to $2.48 billion.
Dow said Tuesday the $2.2 billion direct cash payment reflects the full damages awarded by the International Chamber of Commerce as well as Dow's costs.
“Dow and Kuwait share a long history, and payment of this award brings final and appropriate resolution and closure to the issue,” said Andrew N. Liveris, Dow’s chairman and chief executive officer. “Our partnership with Kuwait includes several industry-leading joint ventures, which are valuable assets in Dow’s portfolio and have consistently returned accretive equity earnings to Dow. We continue to look for ways to strengthen our relationships within the country for the benefit of our partners and Dow shareholders.”