Dow Chemical will acquire all outstanding shares of Rohm and Haas common stock for $78 per share in cash, creating the world’s leading specialty chemicals and advanced materials company and combining the two organizations’ best-in-class technologies, broad geographic reach and strong industry channels.

The transaction marks a decisive move in Dow’s transformation into an earnings growth company with reduced cyclicality, according to reports.  Last December, Dow announced a joint venture with Petrochemical Industries Company of the State of Kuwait (PIC).  With the collective impact of these two deals, performance products and advanced materials will represent 69% of Dow’s total sales, on a 2007 pro forma basis, compared with 51% 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 on the transaction.

Andrew N. Liveris, Dow chairman and CEO, commented:

“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 U.S. with a leading global position in performance products and advanced materials,” said Dow chairman and CEO Andrew Liveris.

“After an extensive analysis of acquisition opportunities in the marketplace, it became clear that Rohm and Haas is the ideal company to accelerate Dow’s transformation.  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 brings us access to new and exciting technologies and offers an extended reach into emerging geographies, all of which are highly complementary to Dow’s existing platforms and value growth priorities.”


In addition to offering immediate and certain value to Rohm and Haas shareholders, the acquisition of Rohm and Haas by Dow will create significant value and enhanced growth potential for Dow shareholders.

Dow’s acquisition of Rohm and Haas significantly strengthens and expands its specialty business and results in a decisive step towards establishing Dow as an earnings-growth company, markedly shifting the balance of its portfolio towards higher growth, higher margin specialties  businesses.

Rohm and Haas provides Dow with an excellent position in a number of industry segments that are poised for significant growth given long-term market megatrends, most notably in the electronic materials and coatings segments.  In addition to its leading platforms in these two important segments, Rohm and Haas has a strong presence in a number of other attractive areas such as water solutions, adhesives, personal care, biocides, and building and packaging materials.  The acquisition will unlock value from Dow’s existing portfolio by delivering a range of innovative new products and technologies to these high growth downstream sectors, while at the same time expanding the product offering for sale through Dow’s own existing market channels.

Dow will 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. 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.