One can sympathize with Andrew Liveris, CEO of Dow Chemical. He is under pressure from a hedge fund holding a big stake in Rohm and Haas to close a deal to buy the specialty chemicals company. Dow is dealing not only with a crushing economic downturn, but also the collapse of a plastics venture in Kuwait. Even in a world of synthetics, synergy is a word one hears a whole lot less frequently these days.The hedge fund, Paulson & Co, says it is the second-biggest shareholder in Rohm and Haas, holding 9 percent of the stock, and like most funds these days has ample reason to want to sell. Squirming, Dow said earlier this month the merger deal was not binding. This confident pronouncement was made in court documents, which gives you an idea where this deal is headed. Paulson wants Dow to consider cutting its dividend, selling stock, raising debt and perhaps contacting the devil to make the deal happen. Never mind that its credit rating would probably fall to junk and that stock investors, seeing few signs of a near-term improvement in demand, would probably not hesitate to further thrash Dow shares.Dow’s stock is worth about a quarter of what it was at the beginning of 2008. By contrast, Rohm and Haas, with its stock in the mid-$50s, is not far from its familiar trading levels going back to the beginning of 2007. It had seen a sharp fall down to the mid-$40s in the two months before Dow offered a 74 percent premium for the stock last July. Wall Street was surprised at the time because the chemicals market looked weak. At this point, it would probably be even more surprised if the deal went through without a fight.Lawyers say Rohm and Haas, seeking to complete the deal, appears to have the stronger argument. But ultimately its legal footing may mean less to the court than the prospect of bringing down Dow, long a pillar of American industry. And while Paulson and Rohm and Haas may see little hope for the company’s prospects without this deal, it’s hard to see how a Dow-Rohm and Haas polymer would prove very durable.Other Deals news:* India’s Sterlite Industries is close to a new deal to buy U.S. copper miner Asarco LLC from bankruptcy, according to a person familiar with the matter.* Japan’s Asahi Breweries and South Korea’s Lotte Group are in talks on a joint acquisition of No. 2 South Korean brewer Oriental Brewery Co for $1.1-$1.6 billion, the Nikkei business daily said.* Bank of China and ICBC are interested in acquiring a stake in Taiwan’s Mega Financial, the Economic Daily reported.* A potential bidder for India’s fraud-tainted Satyam Computer Services backed away from a deal, a day after the outsourcing company named a new chief executive and secured funding to help retain clients and employees.* Australian packaging firm Amcor is in talks to aquire part of Rio Tinto Ltd’s Alcan packaging unit, the third suitor for Rio assets to emerge this week as the miner looks to pay off debt.* Austria could sell its 27 percent stake in phone carrier Telekom Austria this year, Austrian newspaper Die Presse reported, citing sources close to the group.* As embattled Australian power investment firm Babcock & Brown Power hives off assets to pay down debt, at least three companies are hatching plans to capitalise on the distressed sales.(Dow Chemical Company Chief Executive Officer Andrew Liveris delivers a speech at the Global Management Forum in Tokyo October 27, 2008. REUTERS/Yuriko Nakao)
