Rohm and Haas buy not contingent on PIC JV - Dow
10 July 2008 17:00 [Source: ICIS news]
NEW YORK (ICIS news)--Dow Chemical's acquisition of US specialties maker Rohm and Haas deal is not contingent on the close of Dow’s commodity chemicals joint venture with Kuwait's Petrochemical Industries Co (PIC), Dow chief financial officer Geoffery Merszei said on Thursday.
The
“This deal is certainly not contingent on the completion of the Kuwaiti joint venture,” Merszei said in a conference call with the financial community. “It is another source of funding, but we’re not relying on it.”
Added Dow chairman and CEO Andrew Liveris: “We could finance the [Rohm and Haas] deal without the
Dow expects to close its acquisition of Rohm and Haas in early 2009.
Dow Chemical will finance its $18.8bn (€12.0bn) acquisition of Rohm and Haas with an equity investment from Berkshire Hathaway and the Kuwait Investment Authority, as well as debt financing, the company said on Thursday.
US-based holding company Berkshire Hathaway, led by prominent investor Warren Buffet, will contribute $3bn and the Kuwait Investment Authority will put in $1bn - both will receive Dow convertible preferred stock.
Dow has commitments for $13bn in debt financing from Citibank, Merrill Lynch and Morgan Stanley.
Dow would pay $78/share for Philadelphia, Pennsylvania-based Rohm and Haas for $15.3bn and will assume $3.5bn in Rohm and Haas debt.
Dow estimated it is paying 11.5 times FV/EBITDA (firm value/earnings before interest, tax, depreciation and amortisation) on a 12-month trailing basis for Rohm and Haas. With expected cost synergies, Dow said it would pay 7.7 times EBITDA.
($1 = €0.64)
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