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Chemistry in Chemicals
by Megan Barnett
Jul 10 2008
Jul 10 2008
With help from Buffett and Kuwait, Dow Chemical makes a deal.
Last Trade:Change:
Summary:
A holding company owning subsidiaries engaged in a number of business activities, including Insurance and Reinsurance Businesses, … View More
Last Trade:Change:
Summary:
A global materials company that leverages science and technology in many different forms to design materials and processes … View More
Last Trade:Change:
Summary:
The Company is engaged in the manufacture and sale of chemicals, plastic materials, agricultural and other products and services. View More
Warren E. Buffett
Industry:
Finance
Biography:
Mr. Buffett, age 76, has for more than thirty-six years been Chairman of the Board and Chief Executive Officer of Berkshire … View More
Andrew N. Liveris
Industry:
Manufacturing
Biography:
Andrew N. Liveris, 52, Employee of Dow since 1976. General manager of Dow's Thailand operations 1989-92. Group business director … View More
What does it take to do a $19 billion deal at a 75 percent premium in this dismal market?
Cold, hard cash from Omaha and the Middle East, that's what. Or convertible preferred securities will do.
Dow Chemical announced this morning that it is acquiring Rohm & Haas for $18.8 billion, or $78 per share. The price represents a 74 percent premium to Wednesday's share price.
Dow is getting some help financing the deal fromWarren Buffett's Berkshire Hathaway, which is contributing $3 billion, and the Kuwait Investment Authority, with a $1 billion stake. Last December, Dow Chemical entered a joint venture with Petrochemical Industries Company of the State of Kuwait.
Andrew Liveris, chief executive of Dow Chemical, said the company had been looking for an acquisition to help it diversify its business from petroleum-based commodity chemicals. Rohm & Haas makes chemicals for acrylic paints, adhesives, and personal-care products.
"We only ever had two or three companies in our vista that made sense for us,'' Liveris said in an interview with Bloomberg Television, "and our patience and our discipline, the wait for the right moment and the right time for the right property. When it becomes available you make the deal happen.''
Besides being a multibillion-dollar transaction in an otherwise quiet M&A market, this deal is notable for the absence of any private-equity money. Debt financing was committed by Citigroup, Merrill Lynch, and Morgan Stanley, who were also advisers on the deal.
Buffett didn't let his dealmaking keep him from attending the Allen & Co. conference in Sun Valley, Idaho. DealBook noticed yesterday that Buffett seemed preoccupied with work while fellow attendees enjoyed golfing and other activities. No word yet on whether or not he participated in the bridge tournament.
Cold, hard cash from Omaha and the Middle East, that's what. Or convertible preferred securities will do.
Dow Chemical announced this morning that it is acquiring Rohm & Haas for $18.8 billion, or $78 per share. The price represents a 74 percent premium to Wednesday's share price. Dow is getting some help financing the deal from
Warren Buffett's Berkshire Hathaway, which is contributing $3 billion, and the Kuwait Investment Authority, with a $1 billion stake. Last December, Dow Chemical entered a joint venture with Petrochemical Industries Company of the State of Kuwait.Andrew Liveris, chief executive of Dow Chemical, said the company had been looking for an acquisition to help it diversify its business from petroleum-based commodity chemicals. Rohm & Haas makes chemicals for acrylic paints, adhesives, and personal-care products. "We only ever had two or three companies in our vista that made sense for us,'' Liveris said in an interview with Bloomberg Television, "and our patience and our discipline, the wait for the right moment and the right time for the right property. When it becomes available you make the deal happen.''
Besides being a multibillion-dollar transaction in an otherwise quiet M&A market, this deal is notable for the absence of any private-equity money. Debt financing was committed by Citigroup, Merrill Lynch, and Morgan Stanley, who were also advisers on the deal.
Buffett didn't let his dealmaking keep him from attending the Allen & Co. conference in Sun Valley, Idaho. DealBook noticed yesterday that Buffett seemed preoccupied with work while fellow attendees enjoyed golfing and other activities. No word yet on whether or not he participated in the bridge tournament.
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