Rohm & Haas, Dow Chemical Funds to Avoid

As the funding that Dow Chemical (DOW Quote) was counting on to acquire Rohm & Haas(ROH Quote) disappeared Monday, shares of both Dow Chemical and Rohm & Haas tumbled Monday.

Low oil prices and the potential for further commodity deflation prompted the Kuwait government to rethink the valuations on its upcoming investments and to walk away from its planned joint venture with Dow Chemical. Without the $9 billion Kuwaiti investment in Dow's plastics unit, Dow may not be able to raise the necessary funds to complete the deal.

Let's say that does happen. Transaction breakup fees may run as high as $600 to $750 million -- paid by either Dow Chemical or Rohm & Haas, depending of which side is forced to cancel the agreement. Further losses could have the secondary effect on the funds holding shares of these companies. ...