The new deal sees the end of Rohm and Haas’ 26 January 2009 lawsuit against Dow for failing to complete the acquisition by the originally agreed date (C&I 2009, 3, 5). Dow stated at the time that recent developments had created ‘unacceptable uncertainties’ around the funding of the deal.
Under the terms of the new agreement, Dow will complete its takeover of Rohm and Haas on 1 April 2009. The key to the deal is the agreement by Rohm and Haas’ largest shareholders, the Haas Family Trusts and Paulson & Co, to take shares in Dow, rather than the money owed to them from the proceeds of the acquisition. Between them the two major Rohm and Haas shareholders will pocket $2.5bn in Dow shares with another $500m possible at Dow’s discretion.
‘[The shareholders] have clearly been educated by Dow as to the benefits of the deal,’ says Constantine Biller, senior analyst with Clearwater Corporate Finance. Biller adds that the new structure of the company will mean it will not have to sell anything to make up the shortfall – Dow Agroscience included. A number of big businesses, including Syngenta and BASF, were thought to be interested in Dow Agroscience, which is valued at around $6bn. Biller notes that agrochemicals’ counter-cyclical market has made these businesses attractive in uncertain times.