Dow Chemical back out of Rohm and Haas acquisition.

The Dow Chemical Company has confirmed that the acquisition of Rohm and Haas has stalled and will not take place on the 27th January, 2007 as planned.  This comes soon after the announcement by Dow that they had received FTC clearance to go ahead with the acquisition.

The usual econnomic reasons have been given but the key event for Dow has been the failure in December to complete a deal with Petrochemicals Industries Kuwait (PIC) and form the K-Dow JV.  There is still an interest from Dow to make the acquisition, but no clear position regarding when and if the financial situation will improve sufficiently.

Dow Pick New Team After Rohm & Haas Acquisition

After the USD 18.8 mio acquisition of Rohm and Haas, Dow has picked its organisation- the deal is not yet complete, however.

CEO, Andrew N Liveris has decided the formation of the Rohm and Haas Advanced Materials Division, a new Dow division which will incorporate six specialised businesses from both companies.  It will be lead by Pierre Brondeau who is currently the president and COO of Rohm and Haas.

Dow acquires Rohm and Haas

Dow has announced that it has reached agreement with Rohm and Haas to acquire its remaining shares for USD 78 (total transaction of USD 18.8 bn). This makes Dow the 'world's leading speciality chemicals and advanced materials company.'

Last December, Dow announced a joint venture with Petrochemical Industries Company of the State of Kuwait (PIC), and the collective impact of these two deals, means that the performance products and advanced materials will represent 69 percent of Dow’s total sales (they were 51 percent prior to these transactions).

Financing for the acquisition includes an equity investment by Berkshire Hathaway and the Kuwait Investment Authority in the form of convertible preferred securities for $3 billion and $1 billion respectively. Debt financing has been committed by Citi, Merrill Lynch and Morgan Stanley who acted as financial advisors.

Rohm and Haas strengthens Dow's position in a number of industry segments, notably in the electronic materials and coatings segments. Rohm and Haas also has a strong presence in a number of other areas such as water solutions, adhesives, personal care, biocides, and building and packaging materials.