InterviewDow will not renegotiate Rohm and Haas

02 December 2008 16:17  [Source: ICIS news]

By Joseph Chang

NEW YORK (ICIS news)--Dow Chemical will not look to renegotiate the terms of its pending acquisition of US specialties giant Rohm and Haas for $18.8bn (€14.9bn) despite falling values, Dow chairman and CEO Andrew Liveris said on Tuesday.

“Unless we were given something from the regulators, there’s no reason to do that,” Liveris said.

“That creates a lose-lose situation. Right now, we’re going to make the deal a win-win.”

In July, Dow agreed to pay $78/share for Rohm and Haas, a premium of 74% over its previous stock price of $44.83.

Since then, the value of just about every chemical company, including Dow, has tumbled. Rohm and Haas closed at $70.82/share in New York trading on Monday.

Dow’s stock price initially fell $1.50, or 4.4% to $32.46 on the deal, but since then has fallen to below $18.

“Adverse business conditions are not a reason to break up a deal, especially as this is a deal for the ages,” said Liveris.

“People can look at the negative side and say things changed a lot, but in a way, that’s just too bad. Cycles come and go, but a 99-year-old company like this doesn’t come up for sale too often.”

While the price of Rohm and Haas on the public market today would assuredly be lower without the Dow deal, “they might not be selling [at those levels],” so it was a moot point, said Liveris.

“Unless you’re buying distressed assets, timing [doesn’t play much of a factor]. Quality assets selling at a bargain price doesn’t exist.”

Dow has had more than 700 meetings with Rohm and Haas since July to discuss integration and growth strategies, said Liveris.

“This is like beachfront property in Malibu. Maybe a storm hit and took a few shingles off the roof, but this is a quality property and markets will recover,” Liveris said.

“I’m never going to make anyone comfortable that the July price was not too high a price, because in today’s reality, of course it is,” he added.

“But I’m homing in on the quality of the business and what we can do to fulfil the economics. I’m confident we can do that.”

($1 = €0.79)

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By: Joseph Chang
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