By Christopher Hinton
NEW YORK (Dow Jones) -- Dow Chemical Co. and specialty-materials
maker Rohm & Haas Co. said Friday they were in discussions
regarding a soured $15.3 billion merger deal and a pending
lawsuit.
The companies said they would not comment further. Dow Chemical
(DOW) had agreed to buy Rohm & Haas (ROH) in July, but the
economic crisis increased the risk of the deal beyond what Dow
Chemical thought to be a fair price.
Rohm & Haas sued the chemical giant, and a court date was
set for March 9.
Shares of Dow Chemical jumped 8.5% to $7.03 after having fallen
more than 80% since mid-September when the recession took grip.
Shares of Rohm & Haas surged 16% to $62.63, down just 14% since
the autumn.
Standard & Poor's credit-rating service said it was
encouraged by the ongoing discussions, resulting in no change to
Dow Chemical's long-term corporate rating.
"Dow, as a global company with a diverse business mix has
considerable options to address the very challenging business
climate," the agency said in a statement.
Separately, Dow Chemical said in a government filing that a
long-term loan from a group of investment bankers through Citigroup
was reduced to $12.5 billion from $13 billion.
Funds from the loan will be used in its purchase of Rohm &
Haas and to retire certain debt, the company said.