Rohm And Haas Shareholders Approve Morton Acquisition; Create $6.5 Billion Company

On June 21, 1999, shareholders from Rohm and Haas (Philadelphia; 215-592-3054) approved the proposal to acquire Morton International (Chicago), a manufacturer of specialty chemicals and salt. This action creates a $6.5-billion specialty chemical company, placing Rohm and Haas among the top three specialty chemical companies in the world.

Morton Acquisition
Business Strategy
Other Shareholder Resolutions

Morton Acquisition (Back to Top)
Rohm and Haas announced its intention to acquire Morton International on Feb. 1, 1999, for a combination of cash and stock totaling $4.9 billion. Morton's specialty chemical products are found in food packaging, computer circuit boards, car finishes, furniture coatings, and other products. Morton International reported $2.5 billion in worldwide revenue in fiscal year 1998.

"This is a remarkable day for Rohm and Haas," says Chairman and CEO J. Lawrence Wilson. "By the end of this day, Rohm and Haas will have a market capitalization, revenues, and level of profitability that place us among the world's top three specialty chemical companies."

Rohm and Haas shareholders approved an increase in the number of common shares from 200 to 400 million, and plan to use a portion of those shares for the acquisition. Morton shareholders also voted to approve the acquisition. Once appropriate legal papers are filed in the states of Delaware and Indiana, Rohm and Haas will exchange $24.55 in cash and .368776 of a share of its common stock for each outstanding Morton common share.

"As separate companies, Rohm and Haas and Morton had the capability to increase sales revenue at above GDP rates—in the 4 to 5% range," says J. Michael Fitzpatrick, president of Rohm and Haas. "As a combined company, you can expect us to report sales growth in the 6 to 8% range, beginning in 2001, as long as economic conditions remain stable."

Fitzpatrick also committed the company to a $300-million reduction in operating costs by the end of next year. He said the bulk of the savings would come from infrastructure adjustments, more efficient raw material and packaging purchases, and improvements in the company's manufacturing network.

Business Strategy (Back to Top)
According to Vice Chairman Rajiv Gupta, Rohm and Haas will concentrate on the segments of its product portfolio that have the following "franchise" characteristics:

• Annual sales of $500 million or more
• First or second place standing in their markets
• Full range of products enabling them to become "one-stop shops" for customers
• Emphasis on technology development
• Ability to attract and retain the best talent in the field

Gupta cited five business segments that meet these franchise criteria:

Coatings: A $1.5-billion segment with the full range of technology to make paints and coatings for interior and exterior walls, woods, metals, plastics, and ceramic surfaces of all kinds.

Adhesives and Sealants: A $650-million segment created by technology from Morton and Rohm and Haas.

Electronic Materials: A segment with $1 billion in sales (including the contribution of the Rodel affiliate). This area offers a fully integrated, fully compatible line of products for the semiconductor and printed wiring board industries.

Plastics Additives: A $500-million portfolio includes processing aids, impact modifiers, stabilizers, and lubricants.

Salt: An $800-million business includes some of the world's best known brand names for grocery salt including Morton, Windsor, La Baleine, and Fleur de Sel de Camargue.

Other Shareholder Resolutions (Back to Top)
During the shareholder's meeting, Rohm and Haas chairman Larry Wilson announced that he would retire on Sept. 30, 1999. During Wilson's 11-year term as chairman, Rohm and Haas' total return to shareholders has been 460%. Shareholders also approved a new stock plan for the company and amended the company's charter to require that all future stockholder-proposed actions be taken at shareholder meetings.

Shareholders also approved the company's 15-member slate of directors that, for the first time in more than a decade, includes two members of the Haas Family. David Haas and Thomas Haas joined the board as representatives of the company's largest shareholder group. Once the Morton acquisition is completed, three Morton directors will join the Rohm and Haas board—S. Jay Stewart, chairman and CEO of Morton International (who will become a vice chairman of Rohm and Haas); James Cantalupo, vice chairman of McDonald's Corp.; and Richard Keyser, chairman and CEO of W. W. Grainger Inc.

The new Rohm and Haas Co. has a combined sales revenue of $6.5 billion and employs approximately 23,000 people. The company has150 manufacturing and research sites in 25 countries. While more than 80% of its sales occur today in North America and Europe, Rohm and Haas plans to increase its sales in Latin American and the Pacific Rim.

For more information, call Laura Hadden of Rohm and Haas at 215-592-3054.