Saturday deadline looms over Dow/Rohm and Haas deal

09 January 2009 18:13  [Source: ICIS news]

Deadline looms on Rohm and Haas dealHOUSTON (ICIS news)--US major Dow Chemical could face additional fees of $3.35m/day (€2.45m) if it misses a Saturday deadline to close its $18.8bn merger with Rohm and Haas.

Neither Dow nor Rohm and Haas were immediately available for comment.

Earlier, Dow had planned to pay for part of the Rohm and Haas merger with proceeds from another deal, the failed K-Dow Petrochemicals joint venture with Petrochemicals Industries Co (PIC) of Kuwait.

Dow would have received $7.5bn in cash from PIC, as well as a $1.5bn cash distribution from K-Dow upon completion.

While the Rohm and Haas acquisition is not contingent upon the closure of K-Dow, it would have gone a long way to fund the deal.

Dow has said that was looking for another joint venture partner for its basic plastics business.

Investors also held out hope that the Kuwait Investment Authority (KIA) could kick in more than its earlier announced $1bn in equity to the Rohm and Haas deal, as part of a government settlement with Dow, according to one arbitrageur.

Along with the $1bn in funding from the KIA, investor Warren Buffet planned to invest $3bn in the Rohm and Haas deal. Both parties would receive Dow convertible preferred stock.

Dow also has a commitment from banks for a one-year, $13bn bridge loan.

Shares of Dow were trading at $15.82 as of 12:02 New York time (18:02 GMT), up 0.05%. Shares of Rohm and Haas were trading at $59.84, down 0.26%.

($1 = €0.73)

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By: Al Greenwood
+1 713 525 2645

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