Dow fails to close on Rohm & Haas deal
January 27, 2009
MIDLAND, MI — The circus of legislative limbo continues in the seven-month-long Dow Chemical Co. and Rohm & Haas merger-acquisition, according to the Law Blog from The Wall Street Journal.
Rohm & Hass has now field suit against the chemical goliath, claiming Dow is intentionally breaching its obligation to complete the deal even though it has received all regulatory approvals and has the money available, the story stated.
Dow confirmed that it doesn’t intend to close the $15.3 billion merger by the Tuesday deadline due to a slump in the demand for chemicals that started in the fall, as well as last month’s implosion of Dow’s planned $17.4 billion joint venture with Kuwait, the story noted.
McCarter & English partner Howard Berkower, a merger lawyer not involved in this case, said: "The merger agreement is drafted in a way that’s favorable to Rohm & Haas, including the definition of what constitutes a material adverse effect. The definition excludes general economic conditions and financial markets in general. I can understand why courts are generally loathe to force a company to close a deal, but, as us lawyers say, a contract is a contract. At the end of the day, Dow made its bed, so now it might need to lie in it."
It remains unknown if and when the deal will be finalized and what, if any, fines will be imposed on either party, the story added.
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