Dow Agrees to Buy Rohm & Haas

Dow Chemical, on the eve of a trial, has reversed course and agreed once again to go forward with a deal to buy Rohm & Haas.  Dow had balked at closing the deal after credit rating companies threatened to downgrade the company's debt to below investment grade if the deal had closed on the original terms. The surprise is the new money in the deal.  Large shareholders of Rohm & Haas that include funds run by Warren Buffett and John Paulson have agreed to buy $3 billion in preferred shares in Dow to finance the deal.  It is good money after bad.  Dow shares dropped 11% on the announcement of the new deal.  I was one of the few commentators that thought Dow had a shot, although a long shot, at prevailing in court.