Investor group plans $50 billion bid for Dow Chemical, say reports

09 April 2007

Mumbai: A consortium comprising West Asian and American investors is planning a $50 billion buyout of Dow Chemical Co., newspaper reports in the UK said, quoting sources close to the deal.

The planned offer of $52 to $58 a share for Dow Chemical that values the company at least $50 billion, in what could be the world''s biggest ever leveraged buyout, is likely by the end of the week.

Investors from Saudi Arabia, Kuwait, Bahrain, Qatar, the UAE and Oman will bring in at least half of the capital while US buyout firms, including Kohlberg Kravis Roberts, are contributing the rest, the reports said.

Earlier reports had suggested that strategic changes were afoot at Dow, which was planning increased focus on specialty chemicals. Dow was also reported to be in talks with Reliance Industries for a possible hive-off.

In February last a newspaper report said Dow could get a takeover offer of as much as $54 billion from buyout funds, without naming any sources, and in March, a Wall Street Journal report quoting people familiar with the matter said that Dow was in talks with Reliance Industries Ltd. about a potential joint venture.

The approach was likely to come from a combination of global investors and American private equity giants, who intended to break up the group into smaller companies through a highly leveraged buyout, the report said. Representatives of Dow Chemical and Kohlberg Kravis Roberts were not immediately available for comment.