Is it just me, or does looking at Dow Chemical (DOW) make the Goodfellas soundtrack play in your head? You remember the part where Henry sees the helicopter flying overhead and realizes his whole world is closing in on him?

Maybe things aren’t quite that bad at Dow - but it sure has gotten itself into quite a pickle.

In late December, the Kuwaitis nixed a more than $17 billion joint venture with the company, and there’s now an ongoing saga as to whether or not the company will be able to link up with Rohm & Haas (ROH), as had been planned as far back as July. Dow missed its deadline to finalize the proposed joint venture yesterday.

Why is acquiring the smaller chemical company so important, you ask?

A couple of reasons:

1. A combination could add some high-growth products to Dow's arsenal - and could dramatically cut costs.

2. The deal sports a hefty termination fee. Price tag: $750 million.

Trouble is, Dow is in stutter-step mode.

According to a Dow release:

“Dow has determined that recent material developments have created unacceptable uncertainties on the funding and economics of the combined enterprise. This assessment is based on... the continued crisis in global financial and credit markets combined with the dramatic and stunning failure of Petrochemicals Industries Company of Kuwait (PIC) to fulfill its obligation to complete the formation of the K-Dow joint venture in late December 2008.”

Dow had expected the Kuwaiti deal to produce more than $7 billion in cash, which would definitely have gone a long way toward defraying that pesky termination fee. Dow denies, however, that a cash flow problem is what's keeping it from completing the acquisition.

Rohm & Haas, of course, isn’t sitting idle. It’s apparently suing to force the combination to happen. And frankly, I don’t blame them. Their shareholders are stuck in limbo with a $58 or $59 stock, and they want their $78. After all, given this economic environment, a deal like this doesn't come along every day.

And to cap everything off, there are 2 more points to consider.

First, with business having trailed off significantly, Dow's dividend may be on the chopping block.

Second, let’s assume that a deal with Rohm & Haas somehow gets done. According to the company’s own release, back when the deal was first announced: “Dow expects the transaction to be meaningfully accretive to earnings in the second year following completion, with pre-tax annual cost synergies expected to be at least $800 million per year.“

Second year? That might as well be forever, in this environment.

Long story short, I wouldn’t want to be in Dow or Rohm & Haas’ shoes at this point. I’m steering clear.

Have a great day!