January 8, 2009 / 9:15 PM / 9 years ago

UPDATE 1-Dow-Rohm & Haas deal receives European approval

NEW YORK, Jan 8 (Reuters) - Specialty chemicals company Rohm & Haas Co ROH.N said on Thursday it won European approval to be bought by rival Dow Chemical Co (DOW.N), leaving only U.S. antitrust clearance remaining for the deal.

The takeover has been clouded by uncertainty after Kuwait backed out of a $17.4 billion joint venture, proceeds from which Dow had hoped to use to help fund the deal.

Rohm & Haas said the European Commission determined the pending acquisition would not break its competition law. It said it is waiting for clearance from the Federal Trade Commission and still expects the deal to close in early 2009.

If the merger is not completed by Jan. 10, Dow faces a "ticking fee" that requires it to pay Rohm around $100 million more for every month it does not close the transaction.

Lawyers have said that, if the deal does not receive antitrust approval, Dow could wiggle out of what is otherwise a very strong merger agreement. In that event, Dow could walk away from the deal by paying a $750 million breakup fee. (Reporting by Michael Erman; Editing by Andre Grenon)

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