DOW DENIES TAKEOVER RUMOR, FIRES TWO EXECS BUSINESS TUMULT: Dow deals with upheavals around takeover talk
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OW CHEMICAL fired two senior executives on April 12 after learning that they had been involved in unauthorized discussions with third parties about the potential acquisition of the company. The two are J. Pedro Reinhard, who retired as chief financial officer in October 2005 and has been serving as senior adviser and director, and Romeo Kreinberg, executive vice president for performance plastics and chemicals. The terminations came just three days after a denial by Dow's management and board that a leveraged buyout is in the works. An article appearing in the April 8 edition of a British tabloid, the Sunday Express, maintained that an investment group, including Middle Eastern investors and the private equity firm Kohlberg Kra-
SENATE CLEARS STEM CELL BILL CHARGED RESEARCH: Congress moves to expand embryonic stem cell policy
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, Y A VOTE OF 63 TO 34, the Senate cleared , legislation that would increase the number of human embryonic stem cell lines eligible to be used in federally funded research. The bill (S. 5) is similar to one passed by the House in January (C&EN, Jan. 15, page 12). The Senate and the House are expected to work out a compromise bill that will be sent quickly to President George W. Bush. The Senate bill, like the House version, would allow researchers to use federal funds to study stem cell lines derived from embryos that were originally created for fertility treatment but are no longer needed and are scheduled to be discarded. The Senate version gives NIH expanded oversight of human embryonic stem cell research. "S. 5 takes off the handcuffs" from researchers in terms of the number of stem cell lines available by allowing them to "use, under ethical guidelines, those
vis Roberts, had secured $50 billion for a takeover bid. According to Dow, Reinhard and Kreinberg engaged in highly inappropriate activities that violated the company's code of business conduct. "We are greatly saddened by the disrespect shown by our former colleagues," says GEO Andrew N. Liveris. "But we will move on to shape our future with an even greater resolve to execute our strategy and deliver value to our shareholders." Amid the turmoil, Dow has advanced its asset-light strategy to find complementary partners to help reduce capital investment and increase earnings. It has agreed with Chevron Phillips Chemical to combine certain styrenics operations in North and South America to create an integrated venture that is better positioned to compete. By partnering with Chevron Phillips, Dow will improve its access to styrene feedstock, while the partners together will strengthen their regional presence and reduce costs. Nevertheless, Merrill Lynch chemical analyst Don Carson points out that rumors of a buyout or other big transaction have whetted investors' appetites for a substantial, cash-generating change in Dow's portfolio; the deal with Chevron Phillips is not one of these, he says.—ANN THAYER
embryos that are slated to be discarded," said Sen. Tom Harkin (D-Iowa). Harkin, along with Sen. Arlen Specter (R-Pa.), led the charge in the Senate for expanding the federal policy in this area. Immediately after the vote, Bush reiterated his intent to veto this bill, just as he vetoed similar legislation last July. "This bill crosses a moral line that I and many others find troubling," he said in a statement. "If it advances all the way through Congress to my desk, I will veto it." Leaders from both houses have pledged to override a veto. "We can't decide what we do around here because a president—any president—threatens to veto something," Harkin said. Supporters of the bill are optimistic that they can get the necessary twothirds vote in the Senate; however, it is not clear if the House has the necessary votes. In addition to S. 5, the Senate also passed an alternative stem cell bill (S. 30), known as the Hope Act, which has White House support. That legislation calls for intensifying research on ways to derive pluripotent stem cells without destroying viable embryos.—SUSAN MORRISSEY
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APRIL 16, 2007
Harkin (leftmost). Specter, and Orrin G. Hatch (R-Utah) speak out in support of the Stem Cell Research Enhancement Act (&5).
