It has been a turbulent year for Dow Chemical Co. (NYSE:DOW). The new year saw the company's Kuwaiti partner pull out of a proposed joint venture, which in turn threw into doubt Dow's planned $16.3 billion purchase of Rohm and Haas Co. Lawsuits and negotiations followed, with Dow finally closing a deal months late in April by leveraging itself up to its gills.
In the months since, Dow has been paying down its debt and integrating what it bought. And the company is now ready to brag about it. The Midland, Mich.-based firm is inviting analysts and press to
a day-long event in New York City Thursday to show "how we are applying the power of Dow science and technology to develop innovative solutions to address some of the most pressing issues facing the world today."
The event features remarks by CEO Andrew Liveris and a walk through more than two dozen exhibits on renewable energy production, clean water, increased farm productivity, next-gen batteries and zero-odor paints. While the exhibits represent a wide range of Dow activities, some of the products are the direct result of the Rohm deal.
The highly public exhibit is a sign that Dow, which was in the news for all the wrong reasons last winter as it scrambled to figure out how to buy Rohm, is now seeking out the spotlight. The company said last month a series of divestitures and new financings has allowed it to fully pay off a $9.2 billion bridge loan used to buy Rohm, taking some of the pressure off its balance sheet.
Wall Street has noticed. The company's shares traded Wednesday afternoon at $26.67 apiece, up substantially from a 52-week low of $5.89 hit back in March as fear over the amount of debt the company was taking on to buy Rohm was at its peak.
UBS (NYSE:UBS) analyst Don Carson in a note previewing Thursday's investor day says Dow's "performance businesses are benefiting from cost synergies with the acquired [Rohm] businesses, which translates into high incremental margins as volumes recover." He estimates that synergies from combining the two companies' strengths could contribute up to one-third of earnings per share once Rohm is fully integrated. -
Lou Whiteman
Lou Whiteman is a senior writer covering the automotive, transportation and industrial sectors. Follow him on Twitter @louwhiteman
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