UPDATE: Dow Chemical And Rohm & Haas Revisit A Potential Merger

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.