Dow, Rohm and Haas Agree to New Buyout Terms

The Dow Chemical Company on March 9 announced that it has reached agreements with Rohm and Haas and certain of its shareholders that permit Dow to close the acquisition on substantially altered financial terms by April 1.

The agreement resolves litigation initiated by Rohm and Haas against Dow on Jan. 26, 2009. The company filed the lawsuit to force Dow to follow through on its plans to buy Rohm and Haas.

"Dow has taken the time and steps necessary to close this transaction on substantially improved financial terms to the company, despite the continuing financial and economic uncertainty facing our world. The strategic benefits of the acquisition of Rohm and Haas have never been in question; just the path to completing the deal," said Dow Chair and Chief Executive Officer Andrew N. Liveris.

As part of the agreement, Rohm and Haas' two largest shareholders have agreed to purchase $2.5 billion in face value of perpetual preferred equity issued by Dow. In addition, one of the shareholders, the Haas Family Trusts, has agreed that at Dow's option, they will make an investment in an additional $500 million of Dow's equity. These equity investments substantially reduce the debt financing required to fund the acquisition, Dow has restructured the transaction to essentially pay the equivalent of $63 per share in cash, and $15 per share in face value of preferred equity securities.

To fund the acquisition of Rohm and Haas, Dow will use the proceeds from the equity issuances to reduce the amount it would otherwise be required to draw down from the $12.5 billion bridge loan, which was renegotiated to provide a one-year extension on $8 billion of the total loan. The financing for the acquisition also includes equity investments of $3 billion by Berkshire Hathaway and $1 billion by the Kuwait Investment Authority (KIA) in the form of convertible preferred equity.

Download Center

  • Your Guide to Environmental Metrics that Drive Performance

    Translating sustainability into action starts with implementing the right metrics to assess your environmental risk and performance. Learn how to design metrics that improve your decision-making process and drive enterprise performance.

  • Unpacking ESG: 6 Questions You Were Too Afraid to Ask

    Environmental and Sustainability experts from Arcadis and Cority answer 6 of the most pressing questions EHS professionals have about getting started with Environmental, Social, and Governance (ESG) reporting.

  • 5 Keys to Best-in-Class Chemical Management

    Running a safe chemical program is challenging and complex: from knowing what's on-site to proper handling and disposal - all while navigating regulatory changes. Learn the best ways to mitigate chemical risk, get the most value out of your data, and gain buy-in for a chemical management solution.

  • Streamline Your Air Emissions Management

    See how consolidating all your emissions management functions into one centralized system can help you streamline your operations, more easily maintain compliance, and achieve greater time and cost savings.

  • A Crash Course in Creating the Right Environmental Scoring System

    Learn how to develop the right environmental scoring system so you can easily benchmark performance across all your facilities and gain a holistic view of your environmental programs.

  • Industry Safe