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Dow Chemical Co. said Thursday it would acquire Rohm and Haas
Co. for $18.8 billion to expand its advanced materials business and
reduce the cyclical nature of its operations.
The $78 per share all-cash deal -- which is further evidence that the deal world is now dominated by strategic rather than private equity buyers -- represents a premium of nearly 74% to the Philadelphia-based target's Wednesday close of $44.83. In premarket trading, Rohm and Haas shares were up to $75.75.
Midland, Mich.-based Dow said in a statement the deal will create the top specialty chemicals and advanced materials company globally. Furthermore, the deal is geared toward transforming the chemical giant into an "earnings growth company with reduced cyclicality." Coupled with a December joint venture with Kuwait's Petrochemical Industries Co., Dow's performance business units will represent 69% of total sales. Berkshire Hathaway Inc. and the Kuwait Investment Authority are buying $3 billion and $1 billion, respectively, of Dow convertible preferred securities to help fund the deal. Citigroup Inc., Merrill Lynch & Co. and Morgan Stanley have committed debt financing and are serving as financial advisers. Dow shares closed down 2.8% Wednesday at $33.96 and fell nearly 8% in premarket trading to $31.25. - Carolyn Murphy See full story on TheDeal.com Categories Deal Video
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