2nd UPDATE: FTC OKs Dow, Rohm & Haas Deal, With Conditions
January 23 2009 - 1:30PM
Dow Jones News
The U.S. Federal Trade Commission gave antitrust clearance
Friday to Dow Chemical Co.'s (DOW) $18.8 billion acquisition of
rival chemical manufacturer Rohm & Haas Co. (ROH), but required
Dow to sell assets as a condition of government approval.
Under a settlement with the FTC, Dow agreed to sell its acrylic
monomer, hollow sphere particle and acrylic latex polymer
businesses.
Dow does not have to sell the assets until after the deal
closes.
Dow also agreed to put procedures in place to ensure it doesn't
have access to competitively sensitive non-public information
regarding any businesses it acquires from Rohm & Haas.
Friday's FTC announcement puts pressure on Dow to close a deal
that has been criticized as expensive and risky in the current
economic climate.
The company has faced questions of whether it will be able to
complete the Rohm & Haas deal after a major joint venture with
Kuwaiti state-owned company Petrochemical Industries Inc. fell
through. Dow had planned to use cash from the joint venture to
finance the Rohm purchase.
Dow and Rohm issued a brief statement Friday afternoon saying
they were "discussing the closing of the transaction contemplated
by their pending merger agreement."
Spokespeople for Dow and Rohm did not return calls for
comment.
The FTC said in a statement that Dow's concessions were
necessary because the companies are direct and significant
competitors in certain markets for acrylics and other industrial
chemicals used to make coated paper products, paints and
adhesives.
The settlement would ensure competition in those areas and keep
consumers from seeing higher prices, the commission said.
The FTC said Dow has to sell the assets within 240 days from the
acquisition date of Rohm, or within 240 days from when Friday's
settlement is accepted for public comment, whichever comes later.
If Dow does not sell the assets in that time, a
commission-appointed trustee may do so, the FTC said.
The FTC initially said Dow had 180 days to sell the assets, but
said later in the day that the company actually had 240 days.
-By Brent Kendall, Dow Jones Newswires; 202-862-9222;
brent.kendall@dowjones.com
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