4 SEPTEMBER 2008

F O C U S O N P O W D E R C O A T I N G S

close its site at La Mirada, CA(paint, coatings, packaging andconstruction products). The grouphopes to achieve savings of $110M on its pre-tax profit from 2010.It will focus on expanding marketssuch as Asia. The region had aturnover of $8.9 bn in 2007.Pacific Asia increased inimportance between 2005 and2007, up from 18% to 22%.Europe’s share remained stablebut N America fell from 53% oftotal activities to 49%. Thecompany also plans to reduce itsworkforce of 316 at Lauterbourg,France by 61 as a result of theclosure of Dow Agrosciences unitat the end of 2009. The two firmsshare the same site. Thewithdrawal of Dow will increaseproduction costs at Lauterbourg.Dow Agrosciences currentlyproduces the fungicide Dithane atthe site. The activity was acquiredfrom Rohm and Haas in 2001.Rohm and Haas retainedproduction of plastic additives,paints and coatings.

Chimie Pharma Hebdo, 23 Jun 2008, (428),10 (in French)

Dow acquires Rohm and Haas,creating world’s leading specialitychemicals and advanced materialscompany

Dow and Rohm and Haasannounced a definitiveagreement, under which Dow willacquire all outstanding shares ofRohm and Haas common stockfor $78/share in cash. Theacquisition of Rohm and Haas willmake Dow the world’s leadingspeciality chemicals andadvanced materials company,combining the two organizations’best-in-class technologies, broadgeographic reach and strongindustry channels to create anoutstanding business portfolio withsignificant growth opportunities.Financing for the acquisitionincludes an equity investment byBerkshire Hathaway and theKuwait Investment Authority in theform of convertible preferredsecurities for $3 bn and $1 bn.

Debt financing has beencommitted by Citi, Merrill Lynchand Morgan Stanley who actedas financial advisors on thetransaction. The transaction,coupled with the pending jointventure between Dow and PIC,will increase the pro forma 2007EBITDA contribution from Dow’sPerformance businesses to 67%from 52%, delivering greaterearnings consistency throughoutthe industry cycle. Rohm andHaas provide Dow with anexcellent position in a number ofindustry segments that are poisedfor significant growth given long-term market mega trends, mostnotably in the electronic materialsand coatings segments. Inaddition to its leading platforms inthese two important segments,Rohm and Haas has a strongpresence in a number of otherattractive areas such as watersolutions, adhesives, personalcare, biocides, and building andpackaging materials. Dow expectsthe transaction to be meaningfullyaccretive to earnings in thesecond year following completion,with pre-tax cost synergiesexpected to be at least $800 M/y.Key areas of cost savings includeincreased purchasing power forraw materials; manufacturing andsupply chain work processimprovements; and the eliminationof redundant corporate overheadfor shared services andgovernance. The key advantagesof this acquisition are elaboratedin the article. Dow will establishan advanced materials businessunit at Rohm and Haas’ currentheadquarters in Philadelphia andintends to contributecomplementary Dow businessesto Rohm and Haas’ existingportfolio, such as coatings,biocides and personal care. Thetotal revenue of this new unit willapproach $13 bn. Two Rohm andHaas directors will join the DowBoard of Directors, to allow forthe continued stewardship ofRohm and Haas’ corporateculture and assets, bringing thetotal size of Dow’s board to 14.The transaction, which has been

unanimously approved by theBoards of Directors of bothcompanies, remains subject toapproval by Rohm and Haasshareholders, customaryconditions and receipt ofregulatory approvals. Thecompanies are targetingcompletion of the transaction byearly 2009. Dow is a diversifiedchemical company that combinesthe power of science andtechnology with the HumanElement to constantly improvewhat is essential to humanprogress. Leading the way since1909, Rohm and Haas is a globalpioneer in the creation anddevelopment of innovativetechnologies and solutions for thespeciality materials industry.

Press release from: The Dow Chemical Co,2030, Dow Centre, Midland, MI 48674, USA.Tel: +1 989 636 1463. Fax: +1 989 6361830. Website: http://www.dow.com (10 Jul2008)

A jewel in the crown: DowChemical’s acquisition of Rohmand Haas

A top Dow Chemical official hascited the significance and value ofRohm and Haas (R&H), which itacquired for $18.8 bn. The dealallowed Dow to have world-classfranchises in electronic materialsand boosted its position incoatings raw materials. Dow alsogained more exposure toemerging Asia markets. Theregion accounts for 11% of Dow’ssales and 22% of R&H’s sales.Dow intends to form an advancedmaterials unit at R&H’sheadquarters in Philadelphia. Dowwill contribute operations such ascoatings, biocides and personalcare to the unit, which will haveoverall sales of nearly $13 bn.Dow earlier agreed to contributefive of its basic chemicalsoperations to a jv with Kuwait’sPetrochemical Industries Co,which will pay around $7 bn for a50% stake in the jv. The deal isanticipated to close in late 2008.

Chemical Week, 14 Jul 2008, (Website:http://www.chemweek.com)