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Dow - Rohm and Haas Deal On the Rocks?

Published: 26 January 2009
 by Staff
MIDLAND, MI and PHILADELPHIA, PA – The pending Dow Chemical and Rohm and Haas deal looks like it is not going to close by the January 27, 2009 deadline. According to a release from Dow, “unacceptable uncertainties” related to both funding and the performance of the combined companies are key factors. 

 "Our long term strategy remains unchanged and the proposed acquisition of Rohm and Haas is consistent with this strategy," said Andrew N. Liveris, Chairman and CEO. 

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 unsustainable at this time.

"Dow Chemical has a long history of resiliency in responding to changing market conditions, and that resiliency continues," said Liveris, "but the world has changed significantly and we still do not see the bottom of this unprecedented demand destruction which only accelerated through the fourth quarter and brought December operating rates to historic lows. The Company's commitment to remain financially strong is part of the DNA of this 112-year old company."  

In a separate release, Rohm and Haas announced it had received notification that Dow did not intend to close on or before the required date. The company commented that all of the required approvals for the closing and the merger agreement are in place that the terms of the agreement require Dow close by January 27, 2009. Rohm and Haas stated that it intends to pursue all available alternatives to protect its shareholders' interests.

There is a $750 million break up fee on the deal and the “ticking fee” requires that Dow pay about $100 million per month, for every month the transaction is delayed.

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