MIDLAND, Mich. (March 16, 2009)- Dow Chemical Co.'s purchase of Rohm and Haas Co. will go through after all after the two firms reached agreement on a revised deal.
The $15.3 billion acquisition will close April 1, offering better financial terms for Midland-based Dow, but also will result in the elimination of 3,500 jobs from the combined company. Those cuts are on top of 5,000 cuts announced by Dow and 1,500 announced by Philadelphia-based Rohm and Haas since late 2008.
The agreement resolves a lawsuit Rohm and Haas had filed against Dow. Under the new terms, two major shareholders in Rohm and Haas, the Haas family trust and Paulson & Co., will take a $2.5 billion stake in preferred shares issued by Dow. The Haas family also will make an additional investment of $500 million at Dow's option, according to a news release.
Other shareholders of Rohm and Haas will receive the originally agreed-upon $78 per share.
"By reaching agreement on the terms for this transaction, we have delivered excellent value to Rohm and Haas shareholders," Rohm and Haas Chairman and CEO Raj Gupta said in the release.
In a March 9 conference call with stock analysts, Dow Chairman and CEO Andrew Liveris said the most recent deal "is a pragmatic outcome, given current market conditions."
Some of the job cuts will come from closing 24 offices and between 10 and 15 plants.