US-based Dow, a diversified chemical company, has signed a definitive agreement with Rohm and Hass, one of the largest manufacturers of specialty chemicals, to acquire all outstanding shares, for US$ 78 per share in cash.

The acquisition of Rohm and Haas is expected to significantly strengthen and expand Dow's specialty business.

Also, this deal has the power to turn Dow as an earnings growth company, markedly shifting the balance of its portfolio towards higher growth and higher margin specialties businesses. With the acquisition, Dow will become the world’s leading specialty chemicals and advanced materials company.

The acquisition would be financed through an equity investment by Berkshire Hathaway and the Kuwait Investment Authority in the form of convertible preferred securities for $3 billion and $1 billion, respectively.

The debt financing has been committed by Citi, Merrill Lynch and Morgan Stanley, who acted as financial advisors on the transaction.

The companies are targeting completion of the transaction by early 2009.