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Dow beefs up advanced materials offering with new acquisition

Posted: 14 Jul 2008 ?? ?Print Version ?Bookmark and Share

Keywords:acquisition? materials business? specialty chemical?

Dow and has entered a definitive agreement to acquire all outstanding shares of advanced materials provider Rohm and Haas for $78 per share in cash.

Dow anticipates that the transaction will produce significant revenue synergies, through the application of each company's innovative technologies and as a consequence of the combined businesses' broader product portfolio in key industry segments with strong global growth rates. In coatings, for example, combining Dow's mechanical dispersions technology and high throughput research capability, with Rohm and Haas' know-how in acrylic latexes, provides the opportunity to develop further differentiated solutions. Dow's Low Energy Substrate Adhesives technology for non-automotive applications and its INFUSE Olefin Block Co-Polymers technology and products are expected to enhance and broaden Rohm and Haas' product offering for differentiated adhesives.

Dow also plans to establish an advanced materials business unit at Rohm and Haas' current headquarters in Philadelphia and intends to contribute complementary Dow businesses to Rohm and Haas' existing portfolio, such as coatings, biocides and personal care. The total revenue of this new unit will approach $13 billion. Dow will retain Rohm and Haas' corporate name for this advanced materials business unit in order to capitalize on the company's well-established brand value.

"The acquisition of Rohm and Haas is a defining step in our transformational strategy to shape the "Dow of Tomorrow"a high value, diversified chemicals and materials company, creating the largest specialty chemicals company in the United States with a leading global position in performance products and advanced materials," commented Andrew Liveris, Dow chairman and CEO. "The addition of Rohm and Haas' portfolio is game-changing for Dow, enabling us to accelerate the growth of our Performance business portfolio and affording us a strong position in the global specialty chemicals and advanced materials sectors."

Rohm and Haas chairman and CEO Raj Gupta said, "When this transaction is completed, Rohm and Haas will be a critical component of the New Dow, the world's preeminent chemical company and will be aligned with a forward-looking U.S.-based enterprise, committed to investing in research for new technology solutions to many of the most pressing societal needs. We believe that by becoming a part of Dow, we secure a brighter future and greater growth prospects for our employees, consistent with the vision of our founders to remain a high-quality supplier of innovative technology and solutions."

Two Rohm and Haas directors will join the Dow board of directors, to allow for the continued stewardship of Rohm and Haas' corporate culture and assets, bringing the total size of Dow's board to 14.

The transaction, which has been unanimously approved by the boards of directors of both companies, remains subject to approval by Rohm and Haas shareholders, customary conditions and receipt of regulatory approvals. The companies are targeting completion of the transaction by early 2009.





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