Dow's proposed acquisition of Rohm and Haas clears last regulatory hurdle

24-Jan-09

Dow Chemical, an American diversified chemical company and Rohm and Haas, a leading specialty chemicals company jointly announced that Federal Trade Commission (FTC) has voted to accept a consent decree agreed to by The Dow Chemical Company. The FTC approval was the last regulatory hurdle in the proposed acquisition of Rohm and Haas after the European Commission gave a go-ahead for the deal in the start of the 2009. However, Michigan-based Dow and Rohm and Haas were discussing alternatives to push forward with the deal. The Rohm & Hass agreement entails a termination fee of US$750 mln for Dow, should Dow not close the deal within stipulated time. Dow signed an agreement with Rohm and Hass in early July last year for buying outstanding shares of Rohm and Haas for US$18.8 bln and was accepted by Rohm and Haas shareholders by end of October. Unfortunately for Dow, Kuwait decided to abandon the proposed 50:50 PIC-Dow JV worth US$17 bln just days before deal closing date of Jan 1, 2009. As a part of the PIC-Dow deal, the Kuwaiti company was to pay US$7.5 bln to Dow which would have aided the leading American chemical company to finance the debt arising from Rohm and Haas buy-out.