Midland, Michigan - In a transaction worth $18800 million, Dow Chemical is to buy speciality chemicals company Rohm and Haas for $78 per share in cash.
Dow claims the deal will make it "the world's leading speciality chemicals and advanced materials company," adding that the combined technologies, geographic reach and strong industry channels "create an outstanding business portfolio with significant growth opportunities."
The transaction, backed by Berkshire Hathaway, the Kuwait Investment Authority with debt financing from Citi, Merrill Lynch and Morgan Stanley, gives Dow a less cyclical business with potential for better earnings growth, based on performance rather than commodity materials, Dow indicated, in its 10 July announcement.
Following Dow's joint venture with Petrochemical Industries Company of the State of Kuwait (PIC) and this new deal, performance products and advanced materials will represent 69 percent of Dow's total sales, compared with 51 percent previously, the company stressed.
Describing the deal as a move in creating the, "Dow of Tomorrow - a high value, diversified chemicals and materials company, " Andrews Liveris, Dow chairman and ceo commented that adding Rohm and Haas' portfolio is "game-changing for Dow, enabling us to accelerate the growth of our Performance business portfolio and affording us a strong position in the global specialty chemicals and advanced materials sectors."
Rohm and Haas gives Dow "an excellent position in a number of industry segments that are poised for significant growth," Dow said, listing electronic materials and coatings. The Philadelphia, Pennsylvania-headquartered group's polyurethane activities lie in the coatings sector and in various adhesives.