Crystallizing Dows Transformation:

The Acquisition of Rohm and Haas

Andrew N. Liveris
Chairman and Chief Executive Officer
July 10, 2008

SEC Disclosure Rules

Some of our comments today may include statements about our
expectations for the future. Those expectations involve risks and
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disclosures are provided on the internet at www.dow.com in the
Financial Reports page of the Investor Relations section.
July 10, 2008

July 10, 2008

Dows Strategy

JOINT
JOINT
VENTURES
VENTURES
FEEDSTOCKS
FEEDSTOCKS

Products

BASICS

PERFORMANCE

JOINT
JOINT
VENTURES
VENTURES

MARKET
Solutions
FACING
Systems

Technology and R&D

Grow Performance and Specialties

Strengthen competitiveness of Basics
July 10, 2008

CEO Priorities for 2008

Maintain focus on financial discipline
Close on PIC joint venture
Transform our earnings profile

July 10, 2008

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

The Ideal Company for Dows 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

Game Changing Transaction

A defining step in Dows 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

Portfolio Transformation
2007 Revenues
51%

31%

49%
69%

Dow As Is

Pro Forma Dow Post PIC JV / Rohm and Haas

2007 EBITDA
52%

33%

48%

67%

Dow As Is

Pro Forma Dow Post PIC JV / Rohm and Haas

Performance

Basics

Data Excludes Unallocated

July 10, 2008

A Powerful New Dow

Feedstock-Driven Businesses
Asset Light
Joint
Ventures

Chemicals,
Petrochemicals
& Feedstocks

Market-Driven Businesses
Performance
Products

Health &
Agriculture

Rohm and Haas

Advanced
Materials

Electronic
Materials

Industry
Growth Rates

GDP

5%

Specialty
Materials

6-8%

July 10, 2008

>8%

10

Coatings

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

SIGNIFICANT
Growth Synergies

12

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
Coatings

Specialty Chemicals
Specialty Packaging
July 10, 2008

13

Growth in Electronic Materials

Leader
Leader in
in Photoresist
Photoresist Materials
Materials

Next
Next Generation
Generation
Integrated
Integrated Circuits
Circuits

Advanced
Advanced electronic
electronic low
low KK
Technology
Technology (SiLK)
(SiLK)

Printed
Printed Circuit
Circuit Board
Board Materials
Materials

Next
Next Generation
Generation
Integrated
Integrated Circuits
Circuits
Packaging
Packaging

Epoxy
Epoxy Resin
Resin Technology
Technology

Display
Display Films
Films

Advanced
Advanced Display
Display
Films
Films && Materials
Materials

Polymer
Polymer Science
Science

Electronic
Electronic Process
Process Chemicals
Chemicals

Advanced
Advanced Ancillary
Ancillary
Electronic
Electronic Chemicals
Chemicals

State
State of
of the
the Art
Art High
High Throughput
Throughput
Research
Capabilities
Research Capabilities

July 10, 2008

14

Growth in Coatings

Acrylic
Acrylic Latexes
Latexes

Accelerated
Accelerated Growth
Growth in
in
New
Applications
New Applications

High
High Throughput
Throughput Research
Research
Capabilities
Capabilities

Waterborne
Waterborne
Coating
Coating Materials
Materials

Most
Most Innovative
Innovative
Materials
Materials Offering
Offering

Next
Next generation
generation Epoxy
Epoxy
and
Polyurethane
and Polyurethane Technology
Technology

Leading
Leading Position
Position in
in
Acrylic
Market
Segments
Acrylic Market Segments

High
High Performance
Performance
and
Lowest
and Lowest Cost
Cost

Next
Next generation
generation
process
process Technology
Technology

Leading
Leading Technologies
Technologies
and
and Market
Market Position
Position

Unique
Unique Chemistries
Chemistries

Leading
Leading Position
Position in
in
Coating
Coating Materials
Materials

July 10, 2008

15

Growth in Specialty Packaging

Differentiated
Differentiated Adhesives
Adhesives

Specialty
Specialty Acrylates
Acrylates

Performance
Performance
Adhesives
Adhesives

Growth
Growth in
in
Differentiated
Products
Differentiated Products

Low
Low Energy
Energy Substrate
Substrate Adhesives
Adhesives
and
Olefin
Block
Co-Polymers
and Olefin Block Co-Polymers

Advanced
Advanced Polymers
Polymers

Formulation
Formulation Technology
Technology

Accelerated
Accelerated
Development
Development

High
High Throughput
Throughput
Research
Research Capabilities
Capabilities

Broad
Broad Technology
Technology Platform
Platform

Market
Market
Pull-through
Pull-through

Building
Building and
and Construction
Construction
Channel
Channel Access
Access

July 10, 2008

16

Growth in Specialty Chemicals

Acrylate
Acrylate Chemistry
Chemistry

Acrylic
Acrylic and
and Urethane
Urethane
Specialty
Specialty Adhesives
Adhesives

Ion
Ion Exchange
Exchange
Resin
Resin Technology
Technology

Formulation
Formulation Capabilities
Capabilities

Faster
Faster Growth
Growth in
in
Specialty
Specialty Polymers
Polymers
for
for Personal
Personal Care
Care

Enhanced
Enhanced Portfolio
Portfolio of
of
Adhesive
Adhesive Materials
Materials

Growth
Growth in
in
Water
Water Treatment
Treatment
and
and Purification
Purification

High
High Performance
Performance
Specialty
Specialty Chemicals
Chemicals

Cellulosics
Cellulosics and
and
Polymer
Polymer Chemistry
Chemistry

Leading
Leading Polyurethane
Polyurethane and
and Epoxy
Epoxy
Technology
Technology and
and Market
Market Position
Position

Water
Water Purification
Purification Membranes
Membranes
and
and Components
Components

High
High Throughput
Throughput
Research
Research Capabilities
Capabilities

July 10, 2008

17

Geographic Synergies
Leverages Dows asset light advantages
Creates the largest R&D capability in China
Builds on complementary strengths in emerging geographies
Asia Pacific:

Latin America:

Dow

11 percent of sales

Rohm and Haas

22 percent of sales

Dow

11 percent of sales

Rohm and Haas

July 10, 2008

4 percent of sales
18

A Highly Disciplined Approach

Excellent strategic fit
World class high quality enterprise
Meets all of Dows acquisition criteria
Significant cost synergies
Powerful growth synergies

July 10, 2008

19

Financials
Geoffery E. Merszei
Executive Vice President
and Chief Financial Officer

20

Transaction Summary
Price

Dow
Dow to
to acquire
acquire Rohm
Rohm and
and Haas
Haas for
for $78
$78 per
per share
share

Premium

47.9%
47.9% premium
premium to
to Rohm
Rohm and
and Haas
Haas 60-day
60-day average
average price
price

28.7%
28.7% premium
premium to
to its
its 2008
2008 closing
closing high
high

Approvals

Unanimously
Unanimously approved
approved by
by both
both Boards
Boards of
of Directors
Directors

Shareholders
of
32%
of
Rohm
and
Haas
stock,
Shareholders of 32% of Rohm and Haas stock, including
including Haas
Haas family
family
representatives,
have
entered
into
agreements
to
support
the
transaction
representatives, have entered into agreements to support the transaction

Financing

$3
$3 billion
billion equity
equity investment
investment by
by Berkshire
Berkshire Hathaway
Hathaway and
and $1
$1 billion
billion by
by Kuwait
Kuwait
Investment
Authority
Investment Authority

Debt
Debt financing
financing committed
committed by
by Citi,
Citi, Merrill
Merrill Lynch
Lynch and
and Morgan
Morgan Stanley
Stanley

Key Conditions
& Timing

Rohm
Rohm and
and Haas
Haas shareholders
shareholders approval
approval

Customary
Customary regulatory
regulatory approvals
approvals and
and conditions
conditions

Closing
Closing expected
expected by
by early
early 2009
2009

July 10, 2008

21

Comparable Transactions
FV / LTM
EBITDA

FV / LTM
EBITDA
including cost
synergies(1)

Acquirer / Target
BASF / Engelhard

12.4x

9.6x

Akzo Nobel /
Imperial Chemical Industries

10.9x

8.5x

PPG / SigmaKalon

11.8x

7.8x

Dow Chemical /
Rohm and Haas

11.5x (2)

7.7x (2)

(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

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%

10%
10%

Corporate Business
Development Overlap

35%
35%

20%
20%

Manufacturing / Supply Chain

Work Process Improvements
July 10, 2008

23

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

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

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

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

Summary

28

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 Dows
new Advanced Materials division
Add complementary Dow businesses to create a
~$13 billion Rohm and Haas Advanced Materials portfolio
July 10, 2008

29

A Powerful New Dow

Feedstock-Driven Businesses
Asset Light
Joint
Ventures

Chemicals,
Petrochemicals
& Feedstocks

Market-Driven Businesses
Performance
Products

Health &
Agriculture

Rohm and Haas

Advanced
Materials

Electronic
Materials

July 10, 2008

Specialty
Materials

30

Coatings

A Powerful New Dow

2/3 Specialties
Feedstock-Driven Businesses
Asset Light
Joint
Ventures

Chemicals,
Petrochemicals
& Feedstocks

Market-Driven Businesses
Performance
Products

Health &
Agriculture

Rohm and Haas

Advanced
Materials

Electronic
Materials

July 10, 2008

Specialty
Materials

31

Coatings

A Powerful New Dow

2/3 Specialties
Feedstock-Driven Businesses
Asset Light
Joint
Ventures

Chemicals,
Petrochemicals
& Feedstocks

Market-Driven Businesses
Performance
Products

Health &
Agriculture

Rohm and Haas

Advanced
Materials

Electronic
Materials

Specialty
Materials

Adv. Elec.
Materials

Designed
Polymers

July 10, 2008

Coatings

Dow Coating
Solutions

Specialty
Packaging

Epoxy
Systems

32

Polyurethane
Systems

A Powerful New Dow

12

Earnings per Share

>$10.00

Prior
Target

$4.37
4
$3.50
$0.34
0
2002 (Trough)

2005 (Peak)

Next Industry
Trough
(2010/2011)
July 10, 2008

Next Industry
Peak
(2015)
33

A Powerful New Dow

Earnings per Share

12

>$10.00

$4.37
4

With Rohm
and Haas
~$4.00
$3.50

$0.34
0
2002 (Trough)

2005 (Peak)

Next Industry
Trough
(2010/2011)
July 10, 2008

Next Industry
Peak
(2015)
34

Game Changing Transaction

A defining step in Dows 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

July 10, 2008

36