Dow Chemical Fires Execs

Is there a "For Sale" sign on the doors of Dow Chemical or not? That question only became more muddled on Thursday, when Dow fired two senior executives for being involved in "unauthorized discussions with third parties about the potential acquisition of the company."

This comes on the heels of reports in the British press last weekend suggesting that a $50 billion buyout of the diversified chemical giant was imminent. Dow feverishly denied the rumors on Monday. London's Sunday Express reported that a consortium of Middle Eastern investors and U.S. private equity firms, including Kohlberg Kravis Roberts, were behind the deal.

The company first found out on Tuesday that Pedro Reinhard, who is a member of Dow's board of directors, and Romeo Kreinberg, an officer, had been talking to outside parties about a buyout. Both execs had been with the company since the 1970s.

It turns out someone at J.P. Morgan Chase tipped off Dow chief executive Andrew Liveris to the alleged talks, according to the Wall Street Journal. While Liveris made the rounds with the media on Monday insisting the company isn't for sale, he was completely in the dark about how his two colleagues were trying to arrange an acquisition, a Dow spokesman said.

Kreinberg told the Associated Press there is no truth to the allegations, and that he's sought legal advice. "The behavior of the company is very unusual, and the accusations have absolutely no substance and are highly damaging to my reputation after 30 years of employment," he said.

Whatever the future holds for Dow, its board meetings in the near term will likely be a bit awkward. Reinhard will retain his board seat until a vote by shareholders officially excuses him, according to Bloomberg News.

by Megan Barnett

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