01 April 2009 21:54 [Source: ICIS news]
(Adds background, paragraphs 8-18. Update Dow stock price, paragraph 19)
The acquired operations will be combined with Dow to be called Dow's Advanced Materials Division, to be headed by Pierre Brondeau, the company said.
Under the settlement, the two largest shareholders of Rohm and Haas have agreed to buy $2.5bn (€1.9bn) in preferred equity to be issued by Dow, the company said.
In addition, Dow said it is exercising its option to have the Haas Family Trusts make another $500m investment in equity.
As such, Dow will now pay $63/share in cash and $15/share in preferred equity securities, the company said.
With the merger closed, Rohm and Haas stock will cease trading.
“The closing of this transaction strongly positions Dow for the future by transforming our business portfolio,” according to a statement by Dow CEO Andrew Liveris. “This is an exciting day for all of Dow’s stakeholders, and we are committed to delivering on a clear and measurable plan designed to meet the needs of our investors, employees, customers and suppliers, even in this current challenging macroeconomic environment."
Closing the Rohm and Haas deal will start a new surge of activity within Dow, as the company sells off businesses, lays off workers and divests plants - all part of a plan to retire a $12.5bn bridge loan by the end of the year.
The merged company will lay off about 3,500 additional employees, mostly from Rohm and Haas, Liveris said at the time of the settlement. In addition, the merged company will close 10-15 plants and consolidate six research-and development centres.
Dow could raise more money by selling its 45% stake in TRN, a Dutch petroleum refining partnership with energy giant Total, the company said.
Dow may also sell some equity stakes in olefins and derivatives ventures in South East Asia, the company said. Dow has not identified the assets involved but has joint ventures in Malaysia (Optimal) and Thailand (with Siam Cement).
Also, bids have been submitted for the Rohm and Haas Morton salt business, Dow said.
Dow will sell more businesses to comply with US antimonopoly regulators. Assets to be sold include the following:
Shares of Dow traded at $8.65 as of 15:23 hours New York time (19:23 GMT), up 2.61%.
($1 = €0.75)For more on Dow or Rohm and Haas visit ICIS company intelligence
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