Valuation

Due Date: Sunday, Sept 22nd, 2013, 5pm.

Presentation Date: Sept 23rd, in class.

Please e-mail me an electronic copy of the report before the deadline. At the beginning of the class, please also submit a printed copy. The names of all group members should be specified at the top of the report.

For Lead Group: case report should be no longer than six pages of text (double space, Font 11, 1 inch margin on all sides). You should also include any additional financial analysis (i.e. tables) that you would like to attach. The lead groups will also prepare a 20 minutes in-class presentation. The presentation should cover the background of the case, the legal side of M&A transactions, the valuation of Rohm and Hass, and your conclusion.

For Support Groups: the report should be no longer than three pages of text each (double space, Font 11, 1 inch margin on all sides). You should also include any additional financial analysis (i.e. tables) that you would like to attach.

Summary and Objectives

This case analyzes Dow Chemical Company’s proposed acquisition of Rohm and Hass in 2008 as part of Dow’s strategic transformation into a higher-margin performance chemical producer. However, the global economic downfall caused Dow to lose important funding sources and reduced the attractiveness of the acquisition target. Given the confluence of events, Dow refused to close the deal and Rohm and Hass immediately filed a lawsuit attempting to force Dow to close the deal.

1) Is Rohm and Haas an attractive acquisition target? Given the cash flow forecasts of Rohm and Haas, the expected synergies and the potential key risk factors, what is your estimation of Rohm and Haas as an acquisition target around July 2008? Was the proposed bidding price of $78 reasonable?

2) Given that Dow Chemical refused to close the deal at the bidding price, what would be the best option next step for Dow Chemical and Rohm and Hass respectively?

3) This case...