Kuwait, Dow to reduce value of JV to $16b
Kuwait wants to reduce the value of a proposed $19 billion petrochemicals joint venture with U.S. firm Dow Chemical to $16 billion, a Kuwaiti newspaper said on Monday, TehranTimes reported.
Dow and Kuwait Petroleum Corp. (KPC) said last week that they were still in negotiations concerning the deal. The comments came after state news agency KUNA quoted KPC Chief Executive Saad al-Shuwaib as saying the deal was under review due to the global financial crisis.
The Kuwait Times daily quoted a source close to the talks as saying that Kuwait wanted to revalue the deal to $16 billion and contribute about $8 billion to the project. The deal is expected to be finalized this week.
Under the previous arrangement, KPC's Petrochemical Industries Co was meant to pay Dow $9.5 billion to contribute five of the U.S. company's units to the 50-50 joint venture.
The new entity is expected to produce chemicals used in products ranging from plastic bottles and compact discs to computers and agricultural compounds.
Dow and other chemical-makers around the globe are facing one of the worst slumps ever in chemical demand, with a looming recession in most developed countries and a sharp slowdown in emerging economies that have been the main drivers of revenue growth for the sector in recent quarters.