THE CHANGING face of global finance came into stark relief yesterday as Dow Chemical tapped Warren Buffett and Kuwait's sovereign wealth fund to help pay for its $18.8 billion (€11.9 billion) takeover of its US rival Rohm Haas (RH).
The proposed cash deal, which places a large premium on RH's recent valuation, will leave Mr Buffett as the single largest shareholder in the enlarged group and cement ties between Kuwait's government and Dow.
People close to the situation said Dow had been eyeing RH for several months and had faced tough competition from Germany's BASF in the race for the Philadelphia-based company.
The participation of Mr Buffett's Berkshire Hathaway company, which will provide $3 billion, and the Kuwait Investment Authority, which will invest $1 billion in the Dow deal, underlines the instrumental role of cash-rich investors during the current crisis in debt and equity markets.
Mr Buffett recently backed Mars's takeover of Wrigley with $4.4 billion in debt, while sovereign funds have provided billions in rescue capital for troubled US financial institutions such as Citigroup, Merrill Lynch and Morgan Stanley.
Dow chairman and chief executive Andrew Liveris said the deal was "game-changing" for his firm. -
