Did Foundation Donor Dow Chemical Seek Hillary "Favor" To Settle $9 Billion Lawsuit With Kuwait?

Just yesterday we reported on how back in 2009 Bill Clinton pushed for a meeting between Hillary and the CEO of Dow Chemical, a $1-$5mm donor to the Clinton Foundation  (see "New Hillary Emails Expose Bill Pushing Meetings With Foundation Donors, Requests For "Diplomatic Passports"").  As it turns out, Andrew Liveris, CEO of Dow Chemical, probably had a lot to discuss with Hillary around that time including the failure of a joint venture between Dow Chemical and Kuwait (ironically a $5 - $10mm donor to the Clinton Foundation) that cost Dow $9BN. 

Here are the background facts leading up the July 2009 meeting between Andrew Liveris and Hillary Clinton.

Back in July 2008, Dow Chemical made a $15 billion cash bid for rival Rohm and Haas.  Per CNBC, the deal was to be partially funded by a $3 billion equity injection from Hillary supporter, Warren Buffett...

Warren Buffett's Berkshire Hathaway is helping to finance Dow's just-announced deal to buy specialty chemical maker Rohm and Haas for over $15 billion in cash. Berkshire is contributing an equity investment in the form of $3 billion worth of convertible preferred securities.

...and another $9BN from the proceeds of a Dow joint venture with Kuwait.  Per PR Newswire, Dow Chemical's JV with Kuwait, also signed in July 2008, would have netted $9BN of proceeds to Dow.

The Dow Chemical Company (Dow) (NYSE: DOW) and Petrochemical Industries Company (PIC), a wholly owned subsidiary of Kuwait Petroleum Corporation (KPC), today announced that they have signed the Joint Venture Formation Agreement and other key definitive agreements regarding the formation of K-Dow Petrochemicals, a 50:50 joint venture that will be the leading global supplier of petrochemicals and plastics.

 

"The signing of these documents is the critical step in the formation of K-Dow, which will immediately become a leading petrochemicals supplier globally," said Andrew N. Liveris, Dow chairman and chief executive officer. "The formation of K-Dow Petrochemicals will be a critical milestone in Dow's transformation into an earnings growth company. This is a giant step in our strategy of growing our Basics businesses through joint ventures, reducing our capital intensity, and freeing up $9 billion in pre-tax cash proceeds to invest in our Performance businesses. We have effectively set the stage for our next major landmark - completing the proposed acquisition of Rohm and Haas in early 2009."

That said, Dow's plans fell apart when later that year in December 2008, Kuwait got cold feet and decided to back out of the K-Dow JV leaving Dow to scramble for alternative funding sources.  As you'll recall, December 2008 was a fairly "volatile" period for capital markets so raising financing, even for a large company like Dow, wasn't particularly easy.  Per Reuters:

Kuwait decided on Sunday to scrap a deal to form a $17.4 billion petrochemical joint venture with U.S. company Dow Chemical.

 

The cancellation of the deal, which had met opposition in Kuwait's parliament, was acknowledged Sunday by Dow and is a blow to the largest U.S. chemicals company. Dow had planned to use the proceeds to repay a large part of $13 billion in debt it will have to shoulder once its acquisition of rival Rohm & Haas closes, which is expected to be in early 2009.

Dow attempted to postpone the Rohm and Haas acquisition but ultimately ended up closing after raising over $16 billion in debt and preferred stock.  Per the Wall Street Journal:

Dow Chemical Co. completed its acquisition of rival chemical maker Rohm & Haas Co. and narrowly averted the downgrade of its credit rating to junk status, important steps in Dow's quest to ensure its future.

 

But the Midland, Mich.-based chemical giant still has a way to go to shore up its finances after paying the deal's $16.3 billion price tag, analysts said. The company issued $7 billion in preferred stock and borrowed $9.23 billion from a short-term loan to fund the deal.

 

Over the past three months, Dow has been struggling to get its finances together after the collapse of a joint venture with a Kuwaiti state-owned company. Dow had planned to use $9 billion in proceeds from the joint venture to help pay for Rohm & Haas. Dow attempted to delay the acquisition earlier this year, prompting a lawsuit from Rohm & Haas. The two parties settled last month after two major Rohm & Haas shareholders agreed to invest $3 billion in the combined company and Dow was able to extend the terms of a one-year loan to two years.

In January 2009, Dow announced plans to "pursue legal options" against Kuwait for financial penalties related to cancellation of the JV.  Per Fox News:

Dow Chemical will pursue legal action against a state-owned Kuwaiti company that scuttled a $17.4 billion joint venture just days before the deal was to close, and said Tuesday that talks for a similar arrangement with other investors are already under way.

 

"Pursuing legal options is not a decision we take lightly ... but (Petrochemical Industries) is in breach of contract, and we must take action to protect the interests of our company and our shareholders," Liveris said in a statement.

It is during this period between filing a lawsuit against Kuwait in January 2009 and subsequently receiving a $2.2 billion settlement (support here) that Bill was so eager for Dow Chemical CEO, Andrew Liveris, to meet with Hillary.  It is very well know that the K-Dow JV and the decision to back out was a big political hot topic in Kuwait.  It is also known that both Dow Chemical and Kuwait were large donors to the Clinton Foundation.

So those are the facts and we leave the rest to our readers to decide.  Is this just another set of random coincidences or an attempt by Clinton Foundation mega donors to leverage their "relationship" with the Secretary of State to help settle a "delicate" situation.

h/t CR