Dow Halts Rohm and Haas Acquisition/Rohm and Haas Sues
January 26, 2009
MIDLAND, MI/PHILADELPHIA - The Dow Chemical Co. (Dow) has informed Rohm and Haas Co. that Dow will not close on the proposed acquisition of Rohm and Haas as scheduled on Jan. 27, 2009. In the acquisition agreement, entered into on July 10, 2008, Dow agreed to acquire Rohm and Haas for $78 per share. In response to Dow’s announcement, Rohm and Haas has filed suit in a Delaware court, asking a judge to order Dow to complete the takeover.
The feasibility of the deal came into question following the Kuwait government’s decision in late December 2008 to terminate a planned joint venture - known as K-Dow Petro-chemicals (K-Dow) - between Dow and a Kuwaiti company. Rohm and Haas claims that the failure of the K-Dow venture does not provide Dow with a basis for refusing to close, and that Dow’s obligations under the merger agreement are not in any way conditioned on consummation of the K-Dow joint venture.
Dow announced that it had determined that recent material developments have created unacceptable uncertainties on the funding and economics of the combined enterprise. The assessment is based on several macro-economic factors such as the continued crisis in global financial and credit markets combined with the collapse of the K-Dow joint venture.
"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. Since Dow learned in late December of PIC's failure to close the K-Dow transaction, Dow has been aggressively engaged on multiple paths seeking ways to enable the Rohm and Haas transaction. Dow remains interested in discussions to find a solution to complete the acquisition of Rohm and Haas, but recent events have made closing untenable at this time.”