14-Jul-2008 - The Dow Chemical Company

Dow acquires Rohm and Haas, creating world's leading specialty chemicals and advanced materials company

$18.8 billion transaction marks pivotal point in Dow's transformation

Dow and Rohm and Haas announced a definitive agreement, under which Dow will acquire all outstanding shares of Rohm and Haas common stock for $78 per share in cash. The acquisition of Rohm and Haas will make Dow the world's leading specialty chemicals and advanced materials company, combining the two organizations' best-in-class technologies, broad geographic reach and strong industry channels to create an outstanding business portfolio with significant growth opportunities.

The transaction marks a decisive move in Dow's transformation into an earnings growth company with reduced cyclicality. Last December, Dow announced a joint venture with Petrochemical Industries Company of the State of Kuwait (PIC). With the collective impact of these two deals, performance products and advanced materials will represent 69 percent of Dow's total sales, on a 2007 pro forma basis, compared with 51 percent prior to these transactions.

Financing for the acquisition includes an equity investment by Berkshire Hathaway and the Kuwait Investment Authority in the form of convertible preferred securities for $3 billion and $1 billion respectively. Debt financing has been committed by Citi, Merrill Lynch and Morgan Stanley who acted as financial advisors on the transaction.

Andrew N. Liveris, Dow chairman and CEO, commented:

"The acquisition of Rohm and Haas is a defining step in our transformational strategy to shape the "Dow of Tomorrow" - a high value, diversified chemicals and materials company, creating the largest specialty chemicals company in the United States with a leading global position in performance products and advanced materials.

"After an extensive analysis of acquisition opportunities in the marketplace, it became clear that Rohm and Haas is the ideal company to accelerate Dow's transformation. The addition of Rohm and Haas' portfolio is game-changing for Dow, enabling us to accelerate the growth of our Performance business portfolio and affording us a strong position in the global specialty chemicals and advanced materials sectors. Rohm and Haas brings us access to new and exciting technologies and offers an extended reach into emerging geographies, all of which are highly complementary to Dow's existing platforms and value growth priorities.

"Dow has a great deal of respect for Rohm and Haas and values the strong market-facing culture and solid reputation that have made it one of the most successful companies in the specialty sector and such a desirable entity. We are also thrilled with the investment by Berkshire Hathaway and the Kuwait Investment Authority, which we believe further underscores the merits of this transaction, our strategy and the great growth potential resulting from Dow's transformation."

Rohm and Haas chairman and CEO Raj L. Gupta stated, "When this transaction is completed, Rohm and Haas will be a critical component of the New Dow, the world's preeminent chemical company and will be aligned with a forward-looking US-based enterprise, committed to investing in research for new technology solutions to many of the most pressing societal needs. We believe that by becoming a part of Dow, we secure a brighter future and greater growth prospects for our employees, consistent with the vision of our founders to remain a high-quality supplier of innovative technology and solutions."

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