2. SEC Disclosure Rules
► Some of our comments today may include statements about our
expectations for the future. Those expectations involve risks and
uncertainties. Dow cannot guarantee the accuracy of any forecasts
or estimates, and we do not plan to update any forward-looking
statements if our expectations change. If you would like more
information on the risks involved in forward-looking statements,
please see our annual report and our SEC filings.
► In addition, some of our comments may reference non-GAAP
financial measures. Where available, a reconciliation to the most
directly comparable GAAP financial measures and other associated
disclosures are provided on the internet at www.dow.com in the
Financial Reports page of the Investor Relations section.
July 10, 2008 2
4. Dow’s Strategy
JOINT
JOINT
VENTURES
VENTURES Products
MARKET
Solutions
BASICS PERFORMANCE
FEEDSTOCKS
FEEDSTOCKS
FACING
JOINT Systems
JOINT
VENTURES
VENTURES
Technology and R&D
• Grow Performance and Specialties
• Strengthen competitiveness of Basics
July 10, 2008 4
5. CEO Priorities for 2008
►Maintain focus on financial discipline
►Close on PIC joint venture
►Transform our earnings profile
July 10, 2008 5
6. Rohm and Haas
► Premier advanced materials and specialty
chemicals company
► 2007 sales of $8.9 billion
► Leading positions in electronics and coatings
► Headquartered in Philadelphia, located in
27 countries
► 15,700 employees
► Established in 1909
July 10, 2008 6
7. The Ideal Company for Dow’s Transformation
► High quality global advanced materials
company with a rich heritage
► Attractive presence in innovative
specialty businesses
► Impressive financial profile
► Global reach into emerging markets
► Well-established culture of innovation
► Strong, experienced leadership team
July 10, 2008 7
8. Game Changing Transaction
►A defining step in Dow’s transformation to a
high growth, diversified chemicals and materials company
►An unbeatable combination – building on strengths
of each other
►A highly sought after and previously unobtainable enterprise
►Creates the global leader in specialty chemicals and
advanced materials
►A world class portfolio with significant growth synergies
►Delivers significant value for all shareholders
July 10, 2008 8
9. Portfolio Transformation
2007 Revenues
31%
49%
51%
69%
Dow As Is Pro Forma Dow Post PIC JV / Rohm and Haas
2007 EBITDA
33%
48%
52% 67%
Dow As Is Pro Forma Dow Post PIC JV / Rohm and Haas
Performance Basics
Data Excludes Unallocated July 10, 2008 9
10. A Powerful New Dow
Feedstock-Driven Businesses Market-Driven Businesses
Rohm and Haas
Chemicals,
Asset Light Performance Health &
Advanced
Petrochemicals
Joint Products Agriculture
Materials
& Feedstocks
Ventures
Electronic Specialty
Coatings
Materials Materials
Industry
GDP 5% 6-8% >8%
Growth Rates
July 10, 2008 10
11. Strategic Rationale
► Accelerates growth through strong operational
and strategic fit
► Creates new leadership positions in key industry
growth segments
► Opens new channels for existing products and technologies
► Strengthens presence in rapidly developing economies
► Fuels innovation engine
► Delivers more stable earnings with higher growth
July 10, 2008 11
13. Growth Synergies
► $2.0 – $2.6 billion in additional value creation
– Broader product portfolio, technologies, geographic reach
and market channels
– Enhanced leadership positions in key industry segments
► $1.7 billion combined R&D investment
– Among the largest in the industry
► Key opportunities for growth
– Electronic Materials − Specialty Chemicals
– Coatings − Specialty Packaging
July 10, 2008 13
14. Growth in Electronic Materials
Advanced electronic low K
Next Generation Advanced electronic low K
Next Generation
Leader in Photoresist Materials
Leader in Photoresist Materials Technology (SiLK)
Integrated Circuits Technology (SiLK)
Integrated Circuits
Next Generation
Next Generation
Integrated Circuits
Integrated Circuits Epoxy Resin Technology
Printed Circuit Board Materials Epoxy Resin Technology
Printed Circuit Board Materials
Packaging
Packaging
Advanced Display
Advanced Display
Polymer Science
Polymer Science
Display Films
Display Films Films & Materials
Films & Materials
Advanced Ancillary State of the Art High Throughput
Advanced Ancillary State of the Art High Throughput
Electronic Process Chemicals
Electronic Process Chemicals Electronic Chemicals Research Capabilities
Electronic Chemicals Research Capabilities
July 10, 2008 14
15. Growth in Coatings
Accelerated Growth in High Throughput Research
Accelerated Growth in High Throughput Research
Acrylic Latexes
Acrylic Latexes New Applications Capabilities
New Applications Capabilities
Most Innovative Next generation Epoxy
Waterborne Most Innovative Next generation Epoxy
Waterborne
Materials Offering and Polyurethane Technology
Coating Materials Materials Offering and Polyurethane Technology
Coating Materials
High Performance
Leading Position in Next generation
High Performance
Leading Position in Next generation
and Lowest Cost
Acrylic Market Segments process Technology
and Lowest Cost
Acrylic Market Segments process Technology
Leading Position in Leading Technologies
Leading Position in Leading Technologies Unique Chemistries
Unique Chemistries
Coating Materials and Market Position
Coating Materials and Market Position
July 10, 2008 15
16. Growth in Specialty Packaging
Low Energy Substrate Adhesives
Performance Low Energy Substrate Adhesives
Performance
Differentiated Adhesives
Differentiated Adhesives and Olefin Block Co-Polymers
Adhesives and Olefin Block Co-Polymers
Adhesives
Growth in
Growth in
Specialty Acrylates Advanced Polymers
Specialty Acrylates Advanced Polymers
Differentiated Products
Differentiated Products
High Throughput
Accelerated High Throughput
Accelerated
Formulation Technology
Formulation Technology Research Capabilities
Development Research Capabilities
Development
Building and Construction
Market Building and Construction
Market
Broad Technology Platform
Broad Technology Platform Channel Access
Pull-through Channel Access
Pull-through
July 10, 2008 16
17. Growth in Specialty Chemicals
Faster Growth in
Faster Growth in Cellulosics and
Cellulosics and
Acrylate Chemistry Specialty Polymers
Acrylate Chemistry Specialty Polymers Polymer Chemistry
Polymer Chemistry
for Personal Care
for Personal Care
Acrylic and Urethane Enhanced Portfolio of Leading Polyurethane and Epoxy
Acrylic and Urethane Enhanced Portfolio of Leading Polyurethane and Epoxy
Specialty Adhesives Adhesive Materials Technology and Market Position
Specialty Adhesives Adhesive Materials Technology and Market Position
Growth in
Growth in
Ion Exchange Water Purification Membranes
Ion Exchange Water Purification Membranes
Water Treatment
Water Treatment
Resin Technology and Components
Resin Technology and Components
and Purification
and Purification
High Performance High Throughput
High Performance High Throughput
Formulation Capabilities
Formulation Capabilities Specialty Chemicals Research Capabilities
Specialty Chemicals Research Capabilities
July 10, 2008 17
18. Geographic Synergies
► Leverages Dow’s asset light advantages
► Creates the largest R&D capability in China
► Builds on complementary strengths in emerging geographies
Asia Pacific: Dow 11 percent of sales
Rohm and Haas 22 percent of sales
Latin America: Dow 11 percent of sales
Rohm and Haas 4 percent of sales
July 10, 2008 18
19. A Highly Disciplined Approach
► Excellent strategic fit
► World class high quality enterprise
► Meets all of Dow’s acquisition criteria
► Significant cost synergies
► Powerful growth synergies
July 10, 2008 19
21. Transaction Summary
► Dow to acquire Rohm and Haas for $78 per share
► Dow to acquire Rohm and Haas for $78 per share
Price
► 47.9% premium to Rohm and Haas 60-day average price
► 47.9% premium to Rohm and Haas 60-day average price
Premium ► 28.7% premium to its 2008 closing high
► 28.7% premium to its 2008 closing high
► Unanimously approved by both Boards of Directors
► Unanimously approved by both Boards of Directors
► Shareholders of 32% of Rohm and Haas stock, including Haas family
► Shareholders of 32% of Rohm and Haas stock, including Haas family
Approvals
representatives, have entered into agreements to support the transaction
representatives, have entered into agreements to support the transaction
► $3 billion equity investment by Berkshire Hathaway and $1 billion by Kuwait
► $3 billion equity investment by Berkshire Hathaway and $1 billion by Kuwait
Investment Authority
Financing Investment Authority
► Debt financing committed by Citi, Merrill Lynch and Morgan Stanley
► Debt financing committed by Citi, Merrill Lynch and Morgan Stanley
► Rohm and Haas shareholders’ approval
► Rohm and Haas shareholders’ approval
Key Conditions ► Customary regulatory approvals and conditions
► Customary regulatory approvals and conditions
& Timing ► Closing expected by early 2009
► Closing expected by early 2009
July 10, 2008 21
22. Comparable Transactions
FV / LTM FV / LTM
EBITDA EBITDA
including cost
Acquirer / Target synergies(1)
BASF / Engelhard 12.4x 9.6x
Akzo Nobel /
10.9x 8.5x
Imperial Chemical Industries
PPG / SigmaKalon 11.8x 7.8x
Dow Chemical / 11.5x (2) 7.7x (2)
Rohm and Haas
(1) Includes run-rate synergies $200mm for BASF, $375mm for Akzo Nobel, $100mm for PPG, and $800mm for Dow Chemical.
(2) Assumes 2008E EBITDA of $1,645 million.
July 10, 2008 22
23. Significant Cost Synergies
► At least $800 million in annual pre-tax synergies
► Phased in over two years
Purchasing Synergies
Including Raw Materials
Shared Services
and Governance
35% 35%
35% 35%
10%
10% 20%
20%
Corporate Business Manufacturing / Supply Chain
Development Overlap Work Process Improvements
July 10, 2008 23
24. Dow Synergy Track Record
Cost synergies as a percent of target revenue
Union Carbide 18% delivered
Rohm and Haas Ag 16% delivered
Angus Chemicals 15% delivered
EniChem Polyurethanes 14% delivered
Gurit-Essex 16% delivered
Rohm and Haas 9% target
July 10, 2008 24
25. Shareholder Value Creation
► Accelerates revenue growth and improves margins
– Increases percentage of revenues from higher margin,
higher growth specialty business
– Reduces volatility and increases growth in earnings
2007 – 2012
Industry Growth Rates
Dow 4%
Rohm and Haas 5 – 9%
Dow + Rohm and Haas 5 – 7%
SOURCE: SRI Consulting, CMAI, Company filings and presentations July 10, 2008 25
26. Shareholder Value Creation
Meets all Dow acquisition criteria and maximizes long-term
shareholder value
► Strong operational and strategic fit
► Meaningfully accretive to earnings in second year
of transaction
► Significant synergy opportunity
► Exceeds internal return requirements
July 10, 2008 26
27. Retains Financial Flexibility
► Attractive and diverse transaction funding
– Deploy proceeds from PIC joint venture
– Equity investment by Berkshire Hathaway
and Kuwait Investment Authority
– Debt funding (bridge) provided by Citi, Merrill Lynch
and Morgan Stanley
► Maintains solid investment grade credit rating
July 10, 2008 27
29. Leveraging Rohm and Haas Strengths
► Advanced Materials business unit headquartered
in Philadelphia
► Customer, market focus and innovative culture of
Rohm and Haas will be preserved and leveraged
► Rohm and Haas corporate name retained for Dow’s
new Advanced Materials division
► Add complementary Dow businesses to create a
~$13 billion Rohm and Haas Advanced Materials portfolio
July 10, 2008 29
30. A Powerful New Dow
Feedstock-Driven Businesses Market-Driven Businesses
Asset Light Rohm and Haas
Chemicals,
Performance Health &
Joint Advanced
Petrochemicals
Products Agriculture
Ventures Materials
& Feedstocks
Electronic Specialty
Coatings
Materials Materials
July 10, 2008 30
31. A Powerful New Dow
2/3 Specialties
Feedstock-Driven Businesses Market-Driven Businesses
Asset Light Rohm and Haas
Chemicals,
Performance Health &
Joint Advanced
Petrochemicals
Products Agriculture
Ventures Materials
& Feedstocks
Electronic Specialty
Coatings
Materials Materials
July 10, 2008 31
32. A Powerful New Dow
2/3 Specialties
Feedstock-Driven Businesses Market-Driven Businesses
Asset Light Rohm and Haas
Chemicals,
Performance Health &
Joint Advanced
Petrochemicals
Products Agriculture
Ventures Materials
& Feedstocks
Electronic Specialty
Coatings
Materials Materials
Adv. Elec. Dow Coating
Materials Solutions
Designed Specialty Epoxy Polyurethane
Polymers Packaging Systems Systems
July 10, 2008 32
33. A Powerful New Dow
12
>$10.00
Earnings per Share
8
Prior
$4.37
Target
4
$3.50
$0.34
0
2002 (Trough) 2005 (Peak) Next Industry Next Industry
Trough Peak
(2010/2011) (2015)
July 10, 2008 33
34. A Powerful New Dow
12
>$10.00
Earnings per Share
8
With Rohm
$4.37
and Haas
~$4.00
4
$3.50
$0.34
0
2002 (Trough) 2005 (Peak) Next Industry Next Industry
Trough Peak
(2010/2011) (2015)
July 10, 2008 34
35. Game Changing Transaction
► A defining step in Dow’s transformation to a high growth
diversified chemicals and materials company
► An unbeatable combination – building on strengths of
each other
► A highly sought after and previously unobtainable enterprise
► Creates the global leader in specialty chemicals and
advanced materials
► A world class portfolio with significant growth synergies
► Delivers significant value for all shareholders
July 10, 2008 35