Rohm and Haas shareholders approve Dow merger

29 October 2008 16:20  [Source: ICIS news]

Rohm and Haas shareholders approve Dow mergerHOUSTON (ICIS news)--Shareholders of US specialty chemicals firm Rohm and Haas voted on Wednesday in favour of its $18.8bn merger with Dow Chemical.

The deal comes to about $78/share, well above the $68/share level that Rohm and Haas is currently trading under on the New York Stock Exchange.

The merger should close in early 2009, Rohm and Haas said.

After merging with Dow, Rohm and Haas will retain its name and its headquarters in Philadelphia, Pennsylvania. In addition, Dow will contribute several of its specialty chemicals segments to Rohm and Haas.

Dow announced the merger on 10 July, when Rohm and Haas was trading near $45/share.

The news caused Rohm and Haas shares to reach a 52-week high of $76.50. Shares have fallen roughly 12% since.

Earlier, Dow CEO Andrew Liveris defended the acquisition - despite the drop in Rohm and Haas shares.

Recent valuations for the companies' stock did not relect what Liveris called the firms' true value. Had Dow waited and offered a lower price, then Rohm and Haas would have rejected the offer, he added. 

As it is, the rationale behind the merger remains intact, Liveris said.

Stock values have fallen for other chemical merger targets as well.

Ashland is buying Hercules for $23.01/share. Following the announcement, Hercules shares rose to roughly $22, from $13.

Hercules shares are now trading near $16. Ashland said it stands behind the deal.  

Hexion Specialty Chemicals is buying Huntsman for $28/share, while Huntsman is trading near $13.

The merger has spent much of the year mired in litigation. Most recently, lenders have refused to finance the deal, alleging that the solvency opinion justifying the merger was inadequate.

For more on the companies in this story, visit ICIS company intelligence
To discuss issues facing the chemical industry go to ICIS connect

By: Al Greenwood
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