This case analyzed Dow Chemical Company’s proposed acquisition of Rohm and Haas in 2008. The $ 18800000000 acquisition was part of the strategic realignment of the Dow from a slow growth, low margins and cyclical producer of basic chemicals in a higher growth, higher margins and stable manufacturer of performance chemicals. Dow could use at the same time had a joint venture agreement with Petrochemical Industries Company (PIC) of Kuwait, a deal, $ 7 billion in cash, which would be signed generate … Read more »

This case analyzed Dow Chemical Company’s proposed acquisition of Rohm and Haas in 2008. The $ 18800000000 acquisition was part of the strategic realignment of the Dow from a slow growth, low margins and cyclical producer of basic chemicals in a higher growth, higher margins and stable manufacturer of performance chemicals. At the same time the Dow had a joint venture agreement with Petrochemical Industries Company (PIC) of Kuwait, a deal, $ 7 billion in cash, which will be used to the all-cash offer finance could buy Rohm and Haas would generate signed. Dow and Rohm Rohm announced the merger on 10 In July 2008, shortly before the outbreak of the financial crisis in September 2008. The focus of the case is what happened after the financial crisis turned into a global economic crisis. Dow, like all manufacturers of chemicals, threatened the world economy fell into recession in the second half of 2008, and the financial markets froze. To make matters, PIC is a joint venture with Dow terminated in December 2008. As a result, Dow infringed on three fronts were: first, they lost an important source of funding for the proposed acquisition, secondly deteriorated Dow financial and internal cash flow dramatically (the share price was by more than 70% in 2008) and third went Rohm forecast for sales , yield and value steep whereby the attractiveness as a takeover target. Given this confluence of events, Dow sued by the merger agreement with Rohm in January 2009 should be repealed. Rohm responded with its own lawsuit to force completion of the transaction. As of February 2009, Dow’s Board of Directors and CEO Andrew Liveris to decide what is to be done primarily through the acquisition of Rohm and the pending litigation, but also about the company’s declining financial performance and the PIC joint venture.
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from
Benjamin C. Esty,
David Lane
Source: Harvard Business School
22 pages.
Publication Date: Nov 16, 2010. Prod #: 211020-PDF-ENG
Dow Bid for Rohm and Haas HBR case solution

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