WILMINGTON, Del. (Jan. 27, 2009)—Dow Chemical Co.'s planned acquisition of Rohm and Haas Co. is heading to court.
Rohm and Haas, a Philadelphia-based specialty chemicals maker, filed a lawsuit Jan. 27 vs. Dow in Delaware Chancery Court in Wilmington, Del., asking that Dow be required to complete the $15.4 billion transaction.
Officials with Midland, Mich.-based Dow—a major producer of commodity and specialty plastics—had said Jan. 26 that the deal would not close by its original Jan. 27 completion date. Dow officials cited “unacceptable uncertainties on the funding and economics of the combined enterprise” as a reason for the delay.
Andrew Liveris, Dow chairman and CEO, said the company's long-term strategy remains unchanged and the proposed acquisition of Rohm and Haas is consistent with this strategy.
Rohm and Haas officials said the firm “intends to pursue all available alternatives to protect its shareholders' interests.” The U.S. Federal Trade Commission approved the deal Jan. 23.
Dow said its financial condition has been hurt by the global economic recession and by the unexpected failure of a commodity plastics joint venture planned with Petrochemical Industries Co. of Kuwait. PIC pulled out of that deal in late December, leaving Dow without $7.5 billion it would have received in the transaction. Dow was expected to use part of that payment to fund the Rohm and Haas purchase.
Dow is seeking to recoup a $2.5 billion breakup fee from PIC. Dow also is seeking a new partner in the JV. Saudi Basic Industries Corp. has been mentioned by industry sources as a possible PIC replacement.