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The Buffett Way Revealed: Dow Chemical-Rohm & Haas Deal

Posted Jul 10, 2008 11:42am EDT by Aaron Task in Investing, Media, Newsmakers, Commodities, Banking
Related: DOW, ROH, BRK-A, WPO, USB, WFC, WWY
Dow Chemical's $15.3 billion offer for Rohm & Haas is more than just a deal between stodgy chemical companies, says James Altucher, managing partner of Formula Capital.

The deal also provides a window into Warren Buffett's playbook, says Altucher, who has authored a book on the subject.

By buying $3 billion of convertible preferred securities, Buffett is helping to fund the deal and making a low-risk investment in a high-quality company, Altucher explains, much as he did with Mars-Wrigley recently and Gillette back in the 1990s.

The big picture, Altucher says, is that "the Oracle" finding value in Rohm & Haas and Dow Chemical is offering such a huge premium means "the whole market is in play."

Plus, Altucher reveals the cheapest stock Buffett owns today.

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10 Comments

Harvey Sherman
Harvey Sherman - Thursday July 10, 2008 02:06PM EDT

I am not clear about what Mr.Buffett is saying.

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Harvey Sherman
Harvey Sherman - Thursday July 10, 2008 02:06PM EDT

I am not clear about what Mr.Buffett is saying.

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PattieP
PattieP - Thursday July 10, 2008 02:39PM EDT

USB is great buy according to Buffett!

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Yahoo! Finance User
Yahoo! Finance User - Thursday July 10, 2008 02:50PM EDT

I am not clear about what Mr.Buffett is saying.

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David L
David L - Thursday July 10, 2008 03:09PM EDT

Buffet is probably saying to us the consumer "Mo' Money!" He is stinking rich yet he doesn't help the economy.

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Paul L
Paul L - Thursday July 10, 2008 03:10PM EDT

Buffett will also tell you Rohm & Haas is a great company to invest in for the next century since he already purchased $3 billion of its convertible preferred securities. But he didn't tell you before the deal... hmmmm!

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Yahoo! Finance User
Yahoo! Finance User - Friday July 11, 2008 09:56AM EDT

R&H will allow DOW to move out of the me too low end products. Especially the Polyolefins that are getting crushed by the high oil prices with no short term end in sight. The Polycarbonates and acrylic specialties will still allow this segment to pass on costs.

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Turtle
Turtle - Friday July 11, 2008 02:37PM EDT

Hey Paul? Ask Martha Stuart why he didn't. I think we call that insider trading. Dah.

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Turtle
Turtle - Friday July 11, 2008 02:39PM EDT

Hey Paul? Ask Martha Stuart why he didn't. I think we call that insider trading. Dah.

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Turtle
Turtle - Friday July 11, 2008 02:43PM EDT

Hey Dave. Buffet isn't the reason for our bad economy. Since when is it a crime in this country to make money. It's not his fault. Here is an idea, go out and make some money. That's what is great about this country, no one is holding you back except yourself.

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