Dow Chemical 2009 Annual Report Download - page 130

Table of Contents
The following table summarizes the activities related to the Company’s restructuring reserve:
2007 Restructuring Activities
In millions
Impairment of
Long-Lived
Assets, Other
Intangible Assets
and Equity
Investments
Costs associated
with Exit or
Disposal
Activities Severance Costs Total
Restructuring charges recognized in the fourth quarter
of 2007 $ 422 $ 82 $ 86 $ 590
Cash payments - - (1) (1)
Charges against reserve (422) (3) - (425)
Reserve balance at December 31, 2007 - $ 79 $ 85 $ 164
Adjustments to reserve $ 30 30 - 60
Cash payments - (7) (47) (54)
Charges against reserve (30) - - (30)
Foreign currency impact - (9) (1) (10)
Reserve balance at December 31, 2008 - $ 93 $ 37 $ 130
Adjustments to reserve - (15) (5) (20)
Cash payments - (38) (23) (61)
Foreign currency impact - 11 - 11
Reserve balance at December 31, 2009 - $ 51 $ 9 $ 60
The shutdowns and optimization activities related to the 2007 restructuring plan were substantially complete in 2009, with remaining liabilities primarily
related to environmental remediation and pension to be paid over time.
NOTE D – ACQUISITIONS
Acquisition of Rohm and Haas
On April 1, 2009, the Company completed the acquisition of Rohm and Haas. Pursuant to the July 10, 2008 Agreement and Plan of Merger (the “Merger
Agreement”), Ramses Acquisition Corp., a direct wholly owned subsidiary of the Company, merged with and into Rohm and Haas (the “Merger”), with Rohm
and Haas continuing as the surviving corporation and becoming a direct wholly owned subsidiary of the Company.
The Company pursued the acquisition of Rohm and Haas to make the Company a leading specialty chemicals and advanced materials company,
combining the two organizations’ best-in-class technologies, broad geographic reach and strong industry channels to create a business portfolio with
significant growth opportunities.
Pursuant to the terms and conditions of the Merger Agreement, each outstanding share of Rohm and Haas common stock was converted into the right to
receive cash of $78 per share, plus additional cash consideration of $0.97 per share. The additional cash consideration represented 8 percent per annum on
the $78 per share consideration from January 10, 2009 to the closing of the Merger, less dividends declared by Rohm and Haas with a dividend record date
between January 10, 2009 and the closing of the Merger. All options to purchase shares of common stock of Rohm and Haas granted under the Rohm and
Haas stock option plans and all other Rohm and Haas equity-based compensation awards, whether vested or unvested as of April 1, 2009, became fully
vested and converted into the right to receive cash of $78.97 per share, less any applicable exercise price. Total cash consideration paid to Rohm and Haas
shareholders was $15,681 million. As part of the purchase price, $552 million in cash was paid to the Rohm and Haas Company Employee Stock
Ownership Plan (“Rohm and Haas ESOP”) on April 1, 2009 for 7.0 million shares of Rohm and Haas common stock held by the Rohm and Haas ESOP.
As a condition of the FTC’s approval of the Merger, the Company is required to divest a portion of its acrylic monomer business, a portion of its
specialty latex business and its hollow sphere particle business. Total net sales and cost of sales for these businesses amounted to approximately one percent of
the Company’s 2008 net sales and cost of sales. The sale of the required portion of the acrylic monomer business and the required portion of the specialty latex
business was completed on January 25, 2010 (see Note E).
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