Let's not forget why DOW's need for cash was so great. They had agreed to buy RomHass for cash just before the stock market crashed. The agreed upon amount turned out to be nearly more than DOW's market cap after the crash. Their timing couldn't have been worse.
DOW has a terrible record when it comes to mergers. When the bought Union Carbide they got stuck with a bunch of liability from the Bhopal disaster that they though were settled.
Mike, All very true. If these companies were to go through with this merger, I would expect the news feeds would light up with dozens of law firms trying to initiate class actions suits on behalf of DOW shareholders.
This is one of a few test cases before over 3 thousand cases are allowed to go forward. You would have thought that DOW would have learned from their take over of Union Carbide that these things don't go away easily and can go on for years. Vote NO on merger.
"DuPont lost the second C8 lawsuit when a jury said the chemical used to make Teflon caused a southern Ohio man's testicular cancer. The jury in U.S. District Court awarded Marietta College professor David Freeman $5.1 million in actual damages."
With the merger and than the split into 3 companies, it's going to be many years before we get clear financial statements on how this has all worked out. My brain hurts when I have to carefully read footnotes about lots of special onetime charges and changes in accounting practices. All these changes make it too easy to cover up mistakes. Vote NO on merger.
Total shareholder equity in DOW is 25.6 billion, total shareholder equity in DD is 10.4 billion. DOW has a PE of less than 10 and is a growing company, DD has a PE of 27 and is a shrinking company. This agreement was made using out dated financial data. These companies have changed significantly since the deal was made. DOW shareholders are getting screwed.
As a DOW owner I just voted no to the merger. DOW investors get 1 share in the new company while DD investors get 1.28 shares for each share owned. I believe DOW investors are getting a bad deal here. DOW investor would be taking on the risk of large losses because of lawsuits without being compensate. Additionally, DOW has a PE of 10 while DD has a PE of 27. If the merger were canceled I believe DOW stock would go up and DD would crash.