Dow chemical to acquire Rival
Date:07-14-2008
In a deal worth about US $15.29 billion, Dow Chemical Co. has agreed to buy rival Rohm and Haas Co. Assumed debt will boost the total value of the transaction to about $18.8 billion, said the companies, which hope to complete the deal by early 2009.
Dow hopes the deal will fuel its growth into the higher-margin specialty chemicals market; Chairman and Chief Executive Andrew Liveris said: "The addition of Rohm and Haas portfolio is game-changing for Dow." Dow said the deal will make it the worlds leading specialty chemicals and advanced materials company.
Dow plans to establish an advanced materials business unit at Rohm and Haas current headquarters in Philadelphia and will contribute some Dow businesses to Rohm and Haas existing portfolio. That new unit is expected to have a total revenue approaching $13 billion. Dow said it plans to announce a CEO and headquarters for the venture the week of July 14.
Dow said Citi, Merrill Lynch and Morgan Stanley have committed debt financing. The Kuwaiti Investment Authority is helping to fund the deal in the form of $1 billion in convertible preferred securities, while Berkshire Hathaway has agreed to an equity investment of $3 billion in the form of preferred securities. After the deal closes, Berkshire Hathaway will become Dows largest shareholder.
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