DOW
Takeover of Rohm and Haas for nearly USD 19 bn / Financial input from US billionaire, Kuwaiti state
Dow Chemical (www.dow.com) is acquiring all shares of Rohm and Haas (Philadelphia, Pennsylvania / USA; www.rohmhaas.com) for USD 19 bn, including USD 3.5 bn in debt. The deal is the most expensive ever in the international chemicals sector (excluding pharmaceuticals). Analysts say it represents a premium of 74% on the share price of the speciality chemicals producer with annual sales of USD 8.9 bn.
A major part of the financing (USD 3 bn) is being supplied by the Berkshire Hathaway company of US billionaire Warren Buffet. Dow also will receive a USD 1 bn capital injection from Kuwait Investment Authority, which is backing the US group’s joint ventures with the Kuwaiti state-owned Petrochemical Industries Company (PIC, Sabahiya; www.pic.com.kw) – see Plasteurope.com of 28.02.2008. With the transaction, Berkshire Hathaway, whose numerous holdings include US reinforced plastic roofing products manufacturer Johns Manville (Denver, Colorado; www.jm.com) will become Dow’s largest shareholder, with 9.5% of equity.
Dow is said to have looked at a number of other speciality chemicals players in its “Asset Light” drive to diversify away from commodities. Reports indicate also that several other petrochemicals/plastics players looking to broaden their portfolio base into more non-cyclical businesses, including BASF (Ludwigshafen / Germany; www.basf.com), submitted bids for Rohm and Haas. BASF chairman Jürgen Hambrecht told an analyst meeting on 8 July, two days before the Dow deal was announced, that his group was not prepared to pay “any price” for acquisitions.
In the plastics sector, Rohm and Haas currently is active in methacrylate monomers, along with impact modifiers (“Paraloid”) and additives for PVC extrusion and injection moulding (“AdvaLube”). The venerable company was established in 1907 as a joint venture of two German partners, including the founder of MMA/PMMA specialist Röhm, now part of Evonik (Essen / Germany; www.evonik.com). Its former PMMA joint venture – Cyro Industries – is now wholly owned by Evonik – see Plasteurope.com of 10.05.2005.
Dow plans to retain the Rohm and Haas name and the Philadelphia headquarters, where a new Advanced Materials unit with annual sales of USD 13 bn will be set up, that is to include some of Dow’s own business.
A major part of the financing (USD 3 bn) is being supplied by the Berkshire Hathaway company of US billionaire Warren Buffet. Dow also will receive a USD 1 bn capital injection from Kuwait Investment Authority, which is backing the US group’s joint ventures with the Kuwaiti state-owned Petrochemical Industries Company (PIC, Sabahiya; www.pic.com.kw) – see Plasteurope.com of 28.02.2008. With the transaction, Berkshire Hathaway, whose numerous holdings include US reinforced plastic roofing products manufacturer Johns Manville (Denver, Colorado; www.jm.com) will become Dow’s largest shareholder, with 9.5% of equity.
Dow is said to have looked at a number of other speciality chemicals players in its “Asset Light” drive to diversify away from commodities. Reports indicate also that several other petrochemicals/plastics players looking to broaden their portfolio base into more non-cyclical businesses, including BASF (Ludwigshafen / Germany; www.basf.com), submitted bids for Rohm and Haas. BASF chairman Jürgen Hambrecht told an analyst meeting on 8 July, two days before the Dow deal was announced, that his group was not prepared to pay “any price” for acquisitions.
In the plastics sector, Rohm and Haas currently is active in methacrylate monomers, along with impact modifiers (“Paraloid”) and additives for PVC extrusion and injection moulding (“AdvaLube”). The venerable company was established in 1907 as a joint venture of two German partners, including the founder of MMA/PMMA specialist Röhm, now part of Evonik (Essen / Germany; www.evonik.com). Its former PMMA joint venture – Cyro Industries – is now wholly owned by Evonik – see Plasteurope.com of 10.05.2005.
Dow plans to retain the Rohm and Haas name and the Philadelphia headquarters, where a new Advanced Materials unit with annual sales of USD 13 bn will be set up, that is to include some of Dow’s own business.
15.07.2008 Plasteurope.com [211332]
Published on 15.07.2008
German version of this article...