The Dow Chemical Co. (Midland, Mich.) and Rohm and Haas Co. (Philadelphia, Pa.) announced on March 9 that the companies have reached an agreement to close Dow's previously announced acquisition of Rohm and Haas on April 1, 2009. The agreement resolves the litigation initiated by Rohm and Haas against Dow on Jan. 26, 2009, with a resolution that is said to be beneficial for each party.
The settlement agreement involves a new substantial equity investment in Dow of $2.5 billion and at Dow's option an additional $500 million of equity, at the closing of the merger by the two largest shareholders of Rohm and Haas, one of which is the Haas Family Trusts. The other shareholders will receive the original cash consideration at the closing.
"The restructuring of the terms of the transaction allows Dow to
maintain financial flexibility as we proceed to implement our strategy
in a way that realizes the original promise of this acquisition," said
Andrew N. Liveris, Dow chairman and CEO.
"By reaching agreement on the terms for this transaction, we have delivered excellent value to Rohm and Haas shareholders," said Rohm and Haas chairman and CEO, Raj L. Gupta.
At the request of both parties, The Delaware Chancery Court has entered an order providing that Dow will close the merger no later than April 1, 2009, conditioned only on the funding by the two major shareholders and on Rohm and Haas's compliance in all material respects with its interim operating covenants after March 9, 2009.