March 6, 2009

Policy scholar blasts Rohm and Haas

A deal between Dow Chemical Co. and Philadelphia's Rohm and Haas struck in July no longer makes sense, a public policy scholar said.

Stephen Fuller, the director of the Center for Regional Analysis of the School of Public Policy at George Mason University, argued in Forbes Friday that Dow's deal to buy Rohm and Haas for $15 billion would end up with massive layoffs in Michigan, Pennsylvania, Texas and elsewhere.

Valued suppliers and lenders could also feel the effects, cascading the tumult into yet another series of unintended victims, he wrote.

Rohm and Haas, a leader in specialty materials technologies, filed a complaint in the Delaware Court of Chancery, intending to force Dow to complete the deal. Dow has pulled back citing risks to the viability of the combined enterprise.

With a withering economy as a backdrop, Dow's revenue in the fourth quarter fell nearly 25 percent to $10.9 billion, while revenue at Rohm and Haas fell 13 percent to $2 billion, Fuller wrote.

As such, the deal that made sense six months ago "¦ now needs a major reality check, the article said.