Sunday, Rohm and Haas Co. (ROH), in an optimistic update to its merger imbroglio with Dow Chemical Co. (DOW), stated that the latter has the resources and flexibility to make the deal a reality.
The Philadelphia, Pennsylvania-based company accused Dow of embarking on an aggressive campaign, through statements, to frighten Rohm and Haas employees, communities and customers.
Earlier in July 2008, Midland, Michigan-based Dow inked a deal to buy out Rohm and Haas for $15.4 billion or $78 a share at a 74% premium with the hope of broadening its product offerings. The ongoing financial turmoil raised queries about the true value of the deal.
The deal was ratified by the European Union last month and got the nod from The Federal Trade Commission last Friday, triggering a two-business day time frame for conclusion.
In the mean while, Dow's market capitalization dropped sharply to about $13.2 billion.
To make matters worse, Kuwait nixed the $17.4 billion joint venture with Dow's plastic division in December. Although Dow refuted claims that it had pinned hopes on the deal for $7 billion in cash and fund the Rohm and Haas buy out, the collapse of the Kuwaiti deal and gloomy economic scenario has put the Rohm & Haas buyout in jeopardy.
Dow had hoped to finance the deal with a $13 billion bridge loan, a $3 billion equity investment by Berkshire Hathaway Inc. and a $1 billion investment by the Kuwait Investment Authority. The acquisition would have made Dow the world's leading specialty chemicals and advanced materials producer.
Rohm and Haas, at that time, said it would work towards completing the proposed transaction with Dow in early 2009, and indicated that the Kuwait - Dow Petrochemicals deal was not a closing condition for the proposed merger with Dow.
As per the merger agreement, Dow will shell out about $3 million per day for every day delay in the event the deal is not closed within the specified time period. It is believed that Dow has limited room for an exit.
The agreement provided Dow an option to pay $750 million break-up fee, and could have left the deal if the U.S. and European antitrust authorities not approve it.
Rohm & Haas, at that point of time, indicated that both parties must agree to an extension of the deadline. The company also dared to pursue all available alternatives to protect its shareholders' interests.
Rohm and Haas insist that the combination of the two companies will create a strong global competitor to benefit shareholders and all other stakeholders in the long term, a fact that was often expressed by Dow since last summer.
Dow Chemical Co. (DOW) closed Friday's trading at $10.88, down $0.03 or 0.27% on a volume of 16.74 million shares on the NYSE.
Rohm and Haas closed Friday's trading at $56.50, up $1.73 or 3.16% on a volume of 1.57 million shares on the NYSE.
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December 19, 2025 15:10 ET U.S. inflation data and interest rate decisions by major central banks were the highlights of this busy week for economics news flow. Employment data and survey results on the housing markets also gained attention in the U.S. In Europe, the European Central Bank and Bank of England announced their policy decisions and macroeconomic projections.