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American chemical giant could get bigger
By James Rowley |
January 24, 2009, Saturday
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Print Edition
Print Edition
DOW Chemical Co, the biggest United States chemical maker, is on the verge of winning approval from US anti-trust regulators to purchase Rohm & Haas Co, said a person familiar with the matter.
The Federal Trade Commission's staff lawyers have recommended in favor of the deal after Dow agreed to divest its acrylic and emulsion businesses, a second person said. Both people spoke on condition of anonymity.
Dow is seeking to acquire Rohm & Haas to gain production of chemicals used in paints and electronics and decrease its reliance on sales of basic chemicals and plastics.
Dow must complete the transaction without US$9 billion that was to come from the formation of a plastics joint venture with Kuwait, which canceled it last month.
Dow Chief Executive Officer Andrew Liveris has said that he can buy Rohm & Haas using US$13 billion in short-term loans and US$4 billion of equity investments. Dow has said that it will seek court damages from Kuwait. Those damages would exceed the US$2.5 billion break-up fee that Kuwait is obliged to pay for pulling out of the venture, Liveris said in a January 6 interview.
Dow's credit rating was downgraded by both Standard & Poor's and Moody's Investors Service after Kuwait withdrew from the venture.
Dow fell 44 cents, or 2.97 percent, to US$14.38 in composite New York Stock Exchange trading yesterday. Rohm & Haas rose US$2.27 to US$60.46.
European regulators approved the transaction on January 8 after the European Commission in Brussels determined the combination wouldn't harm competition. The European authorities required no divestitures.
The Federal Trade Commission's staff lawyers have recommended in favor of the deal after Dow agreed to divest its acrylic and emulsion businesses, a second person said. Both people spoke on condition of anonymity.
Dow is seeking to acquire Rohm & Haas to gain production of chemicals used in paints and electronics and decrease its reliance on sales of basic chemicals and plastics.
Dow must complete the transaction without US$9 billion that was to come from the formation of a plastics joint venture with Kuwait, which canceled it last month.
Dow Chief Executive Officer Andrew Liveris has said that he can buy Rohm & Haas using US$13 billion in short-term loans and US$4 billion of equity investments. Dow has said that it will seek court damages from Kuwait. Those damages would exceed the US$2.5 billion break-up fee that Kuwait is obliged to pay for pulling out of the venture, Liveris said in a January 6 interview.
Dow's credit rating was downgraded by both Standard & Poor's and Moody's Investors Service after Kuwait withdrew from the venture.
Dow fell 44 cents, or 2.97 percent, to US$14.38 in composite New York Stock Exchange trading yesterday. Rohm & Haas rose US$2.27 to US$60.46.
European regulators approved the transaction on January 8 after the European Commission in Brussels determined the combination wouldn't harm competition. The European authorities required no divestitures.
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