Dow Chemical, a leading chemical manufacturer, announced that it had reached an agreement to acquire in late 2008 Rohm and Haas Company for $15.3 billion. While Dow has competed profitably in the plastics business for years, this business has proven to have thin margins and to be highly cyclical. By acquiring Rohm and Haas, Dow will be able to offer less cyclical and higher margin products such as paints, coatings, and electronic materials. Would you consider this related or unrelated diversification? Explain your answer. Would you consider this a cost effective way for the Dow shareholders to achieve better diversification of their investment
portfolios?

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The Answer of Dow Chemical, a leading chemical manufacturer, announced that it had reached an agreement to acquire in late 2008 Rohm and Haas Company for $15.3 billion. While Dow has competed profitably in the plastics business for years, this business has proven to have thin margins and to be highly cyclical. By acquiring Rohm and Haas, Dow will be able to offer less cyclical and higher margin products such as paints, coatings, and electronic materials. Would you consider this related or unrelated diversification? Explain your answer. Would you consider this a cost effective way for the Dow shareholders to achieve better diversification of their investment
portfolios?

Dow Chemical, a Leading Chemical Manufacturer, Announced That It Had