Friday January 23, 2009
Navivest

On July 10, 2008, Dow (DOW), announced that it had reached a definitive agreement with Rohm and Haas (ROH), under which Dow will acquire all outstanding shares of Rohm and Haas common stock for $78 per share in cash, in an $18.8 billion deal.

That was six months ago, and in that time, as so often happens whenever a merger/acquisition deal is announced, there have been questions as to whether the deal will get done.

Plaguing this deal, was news on December 29, that a planned 50-50 joint venture deal between Dow and Kuwaiti state-owned Petrochemical Industries Company that would have created the leading global supplier of petrochemicals and plastics, had been cancelled at the behest of the Kuwaiti government.

The failure of that deal, which, originally, would have had Dow receive an infusion of cash from Petrochemical Industries Company, was seen as dealing

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Less than a week after its soon-to-be-merged Rohm and Haas Company (ROH) announced it was cutting over 900 jobs, The Dow Chemical Company (DOW) this morning says it will be shedding 5000 positions from its workforce and taking 6000 contractors off its payroll, according to the AP.

The value of DOW's recently signed K-Dow Petrochemical deal -- notable for its Kuwaiti government funding and control -- has been lowered 8% from what was originally anticipated. Was it this that helped spur the latest set of massive layoffs in the state of Michigan -- a state that has already been ravaged by job cuts in the auto industry -- where Dow Chemical is based?

More likely, DOW is looking to strengthen itself ahead of a continued U.S. economic downturn, and layoffs would have happened anyway. Here's what senior chemicals industry analyst Paul Raman, CFA had to say in his latest valuation