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Downturn stalls Dow's Rohm and Haas takeover

Posted: 28 Jan 2009 ?? ?Print Version ?Bookmark and Share

Keywords:Rohm and Haas takeover? acquisition bid?

Is Dow Chemical Co.'s bid to buy Rohm and Haas Co. falling apart amid the economic downturn?

Dow announced July last year it would acquire chemical supplier Rohm and Haas for $15.3 billion in cash. That deal is still pending despite government approval.

The company informed Rohm and Haas Jan. 26 that it will not close the proposed acquisition on or before Jan. 27. "Dow has determined that recent material developments have created unacceptable uncertainties on the funding and economics of the combined enterprise," according to the chemical giant.

Rohm and Haas' stock fell around 8 percent in early trading. Rohm and Haas stated that it intends to pursue all available alternatives to protect its shareholders' interests. Citing the downturn, Rohm and Haas last week disclosed a second set of actions to adjust its operations and cost structure, including the elimination of 900 more jobs.

Dow blamed the problem on the economy and the failure of Petrochemicals Industries Co. of Kuwait (PIC) to fulfill its obligation to complete the formation of the K-Dow joint venture in late December 2008.

Late last year, Dow Chemical was informed by its partners at the Kuwait Petroleum Corp. and PIC about a decision made by the Kuwait Supreme Petroleum Council, to reverse its prior approval of the agreement between Dow and PIC to enter into K-Dow Petrochemicals, a planned 50-50 joint venture company.

"Our long term strategy remains unchanged and the proposed acquisition of Rohm and Haas is consistent with this strategy," said Andrew Liveris, chairman and CEO of Dow, in a statement.

"Since Dow learned in late December of PIC's failure to close the K-Dow transaction, Dow has been aggressively engaged on multiple paths seeking ways to enable the Rohm and Haas transaction," according to the company. "Dow remains interested in discussions to find a solution to complete the acquisition of Rohm and Haas, but recent events have made closing untenable at this time."

- Mark LaPedus
EE Times





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