Rohm & Haas Reaches Deal with Dow

Still don't understand all the details. More later.



Dow reaches tentative deal on Rohm & Haas: WSJ
(MarketWatch)

Dow Reaches Agreement to Close Rohm and Haas Acquisition
(PR Newswire)

Dow Chemical and Rohm Settle a Dispute Over $15.3 Billion Merger (New York Times)

So here is the deal as I understand it:

-Rohm & Haas shareholders get their $78 per share-the original acquisition price.
-The Haas family and another major investor in the company agree to purchase up to $2.5 billion in "perpetual" preferred Dow shares, which pay a cool 15% interest rate.
-Dow also has a call option to have these R & H investors also purchase $500 million in Dow common stock.
-Buffet and Kuwait still major investors.
-Dow plans sale of about $4 billion in assets, including Rohm & Haas's Morton Salt unit.
-The deal closes April 1.

I haven't done the math so I am unqualified to say whether Dow will be able to maintain an investment grade rating under these terms.