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Raj Gupta, chairman and CEO of the US-based chemical giant Rohm & Haas, says he will not be part of Dow Chemical once Dow acquires Rohm & Hass for $18.8 billion.
Rohm & Hass is a Philadelphia-based chemical giant and a Fortune 500 company. Gupta was the point person in the negotiations between his company and chemical conglomerate Dow Chemical for the sale of Rohm & Hass.
In an exclusive interview with rediff.com, Gupta expressed confidence that the projects he had instituted and the ventures Rohm & Haas has entered into in India, would necessarily continue even after the acquisition by Dow because India and Asia in general was a major market and only projected to record even more exponential growth.
Gupta said: "This transaction will probably take nine months to a year" to be consummated, and declared that "it's a transformational transaction for Dow, and it's obviously a big deal for Rohm & Haas and for the industry."
"It's a landmark deal and it's the second or third largest transaction ever done in the chemical materials industry -- it's a $19 billion transaction," he said.
Gupta said that until the transaction closes, Rohm & Haas "will remain as an independent company like it is today --our shares will be traded and I will remain chairman and CEO. (But) Beyond that I've got lots of other things that I am thinking about but my plan is definitely not to go to Dow Chemical. I am going to be 64 end of next year, and I am really looking at a number of other things in terms of what I want to do, (but) not running a big company -- I've already done my share."
Dow, once it absorbs Rohm & Haas will entertain two members of it on the envisaged 14-member board of the company.
Gupta said, "My plan, which I had announced to the board, was that I will be retiring sometime next year anyway." So, being part of Dow Chemical, did not figure in his calculations at all. "It's not something personal for me and my role in the future because my plans about the future were already decided."
He said he had several options to play around with, explaining that "I am on the boards of two large companies -- Vanguard and Tyco -- and I am exploring one of two other major high tech companies right now. And, I actually want to do some more community-based non-profit work and maybe some teaching, but not consulting, but definitely not running a large organization."
Financing for the acquisition includes a $3 billion equity investment by Berkshire Hathaway and $1 billion from the Kuwait Investment Authority, in the form of convertible preferred securities. Debt financing has been committed by Merrill Lynch and Morgan Stanley, which acted as financial advisors on the transaction.
Gupta said the "story behind the story, is a little bit like what's happening at Hershey, happened at Wrigley, happened at the Wall Street Journal, happened at Anheuser Busch now, where the family and the trust which owned 20, 30,40 percent and where you are into the third and fourth generation makes the transition into the new world. So, it's an interesting story from that perspective."
"And, in the case of Rohm & Hass," he said, "it's the transition of a 100-year-old company, from private company to a public company to the next phase of the modern world when a major shareholder decides that it's time for change. That's the story here."
Gupta said that Rohm & Haas had survived for 100 years as an independent company "and we have unbelievably outstanding performance in terms of shareholder records -- 11 percent return for our shareholder for 60 years -- after we went public in 1948. It's an unbelievable story in terms of our shareholders and owners."