Berkshire’s (BRK.A) Warren Buffett finally sees the light!!!
Dow Chemical (DOW) said today that it has agreed to buy Rohm and Haas (ROH), the specialty chemical maker, for about $18.8 billion in cash with the help of Buffett.
Dow will pay $78 a share in cash, a 74 percent premium over Rohm and Haas’s closing price on Wednesday. Rohm and Haas will continue to do business under its own name, and it will maintain its headquarters in Philadelphia.
The new company will be the nation’s largest makers of specialty chemicals, and helps both companies gain scale at a time when commodities prices are still rising.
The deal is an all-cash one. In addition to debt financing from Citigroup (C), Merrill Lynch (MER) and Morgan Stanley (MS),Dow received an equity investment from Berkshire Hathaway and the Kuwait Investment Authority paid $3 billion and $1 billion respectively for convertible preferred securities.
“The acquisition of Rohm and Haas is a defining step in our transformational strategy to shape the ‘Dow of Tomorrow’ – a high value, diversified chemicals and materials company, creating the largest specialty chemicals company in the United States with a leading global position in performance products and advanced materials,” Andrew N. Liveris, Dow’s chairman and chief executive, said in a statement.
Disclosure (“none” means no position):long Dow,C, none
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