German Giant to Buy Morton Salt from Dow

Need a dash of salt?

Dow Chemical Co. plans to sell the stock of Morton International Inc. to German chemical company, K+S Aktiengesellschaft, one of the world's leading suppliers of salt products and plant care chemicals. Historically, Morton is North America's largest salt producer. Sales topped $1.2 billion in 2008.

The announcement about Dow's salt sale, came immediately after the completion of Dow's acquisition of chemical maker, Rohm and Haas, purchased just days ago for $16.5 billion. The deal positioned Dow as an advanced material and specialty chemical giant.

According to Dow Chairman and CEO, Andrew N. Liveris, "We are pleased that we reached an agreement with K+S at an attractive value in such a short period of time."

The sale situates Dow for success with its de-leveraging plan to reduce bridge loan debt of $13 billion from the Rohm and Haas purchase, to about $7.5 billion. It's expected to finalize in the middle of this year at an anticipated price of $1.68 billion.

Liveris also states,

"This sale puts us ahead of schedule on our de-leveraging plan post the close of the Rohm and Haas acquisition. It is the first of many steps designed to deliver on our clear and measurable plan to build value for our shareholders."

Additional actions taken by Dow since January 2009 include:

• renegotiating the bridge loan terms
• reducing dividends
• negotiating favorable terms of the Rohn and Haas transaction

How might this affect salt sales in the US?

Here's a savory thought... as with most acquisitions, prices are likely to change in a pinch. Even pennies on the pound can add up. It may be wise to stock up until the "salt" settles.