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April 15, 2004 12:00 AM

Partners mull dissolving DuPont Dow Elastomers

ERJ Staff
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    From Rubber & Plastics News

    Wilmington, Delaware-Dow Chemical Co. and DuPont Co. are reviewing the business prospects for their DuPont Dow Elastomers L.L.C. joint venture, with dissolving the venture and splitting the assets one possible scenario.

    In connection with DuPont Dow Elastomers' involvement in a price-fixing investigation, Dow recently disclosed it has negotiated an option with DuPont Co. to acquire certain DuPont Dow Elastomer assets related to ethylene and chlorinated elastomers.

    The companies described the transaction as "cashless" to Dow. Should Dow exercise this option, they said, DuPont agrees to buy Dow's remaining equity interest in DuPont Dow Elastomers.

    The companies disclosed the agreement in connection with their deciding to assign DuPont the lead responsibility for dealing with DuPont Dow's involvement in antitrust investigations and price-fixing litigation.

    DuPont said it expects to take a $150-million charge against first-quarter earnings to cover anticipated liability related to antitrust investigations and price-fixing litigation directed at DuPont Dow Elastomers.

    DuPont is to direct DuPont Dow's activities in response to the antitrust and price-fixing matters. DuPont Dow has been subpoenaed in connection with these investigations, it said.

    DuPont and Dow said they concluded it is “in the best interests of all parties involved to consolidate control over directing DuPont Dow Elastomers' response to these investigations and the related litigation.”

    In addition to assuming control over these affairs, DuPont has agreed to fund 100 percent of any potential DuPont Dow liabilities and costs up to $150 million and 75 percent of liabilities and costs exceeding $150 million.

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