Dow Chemical

(DOW) - Get Report

and

Rohm & Haas

(ROH)

both issued reports Friday saying that negotiations are under way regarding their proposed merger and the pending lawsuit between the two firms.

"At this time, the companies cannot predict the outcome of these discussions," the two companies said in a joint press release. "The companies will not comment further on these discussions at this time."

Shares of Dow Chemical were recently up around 9% to to $7.05, while Rohm & Haas was climbing 15.7% at $62.56 a share.

Meanwhile, Standard & Poor's Ratings Services cut two ratings on Dow Chemical on Friday. The ratings agency cut its commercial paper and short-term corporate-credit ratings to "A-3" from "A-2."

S&P did maintain a "BBB" rating on Dow and Rohm & Haas, and kept both companies on Credit Watch with negative implications, meaning a downgrade is possible. The "BBB" rating is two notches above junk status.

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