Is Help on the Way for Dow Chemical?

There are few beehives busier than Dow Chemical (NYSE:DOW) these days. If nothing else, it appears that its rapidly growing agricultural-sciences division may be unloaded or partially sold in the not-too-distant future.

Let's review how we got here: The first thing you need to know is that Michigan-based Dow agreed some time ago to pay $15.3 billion for Philadelphia-based Rohm & Haas (NYSE:ROH), largely a maker of coatings and electrical materials. The tab was based on $78 a share for Rohm & Haas. Those shares closed at $52.07 on Friday. The amount would be partially covered by the $9 billion that Dow would have garnered from a second deal, a $17.4 billion joint venture agreement with Kuwait Petroleum Corp. that would have been called K-Dow Petrochemicals.

That is, until the Kuwaitis became frightened by the world's tumbling economy (and the ups and downs of crude prices) and pulled the plug on their end of the bargain. Which left the folks at Dow scrambling for other ways to complete the Rohm & Haas acquisition. You see, that deal had been signed without a "buyer's remorse" clause, which would have permitted Dow to exit the agreement by paying a penalty. Instead, there's a "ticking fee," which costs Dow $100 million each month the deal isn't consummated.

But help may be on the way. Dow appears to be in talks with a group of private-equity firms, including The Blackstone Group (NYSE:BX). The potential deal apparently would involve a minority stake in the agricultural-sciences division to help fund the Rohm & Haas purchase.

And then there's the possibility of interest from Syngenta AG (NYSE:SYT), a Swiss crop sciences company, which would be more likely to purchase the unit in its entirety. Beyond that, DuPont (NYSE:DD) and Monsanto (NYSE:MON) have similar businesses that could justify their joining the chase.

All this tends to increase my interest in Dow, a company whose management has been attempting to guide toward increased profitability. Unfortunately, they've been ambushed along the way. Now that competing cavalries having been spotted mounting the nearest hill, we may be in for a tussle well worth Foolish attention.

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