DETROIT (AP) -- Dow Chemical Co. will buy rival chemicals maker Rohm and Haas Co. for more than $15 billion in a deal the chemical giant said Thursday was a lynchpin for growth.
The $78 per-share deal includes money from a Kuwaiti sovereign wealth fund and Warren Buffett's Berkshire Hathaway. The price represents a 74 percent premium to Philadelphia-based Rohm and Haas's closing share price of $44.83 on Thursday.
Based on the per-share purchase price and the roughly 196 million shares Rohm and Haas had outstanding as of April 22, the deal is valued by Dow at $18.8 billion including debt.
Rohm and Haas shares soared 66 percent, or $29.47, to $74.30 in premarket trading.
"The addition of Rohm and Haas' portfolio is game-changing for Dow," said Chairman and Chief Executive Andrew Liveris said in a statement.
The acquisition is part of an effort by Dow to move into the specialty chemicals market, which may provide a buffer against ups and downs in basic chemical sales.
"We believe that by becoming a part of Dow, we secure a brighter future and greater growth prospects for our employees," Rohm and Haas Chairman and Chief Executive Raj Gupta said in a statement.
The deal has been approved by both companies' boards. It is pending approval by Rohm and Haas shareholders and regulatory approvals.
The Kuwaiti Investment Authority is helping to fund the deal.
Rohm and Haas has grew rapidly during World War I making batting for saddles and other leather products. In grew rapidly again during World War II making the materials used in aircraft canopies.
Dow Chemical shares fell 3.6 percent, or $1.22, to $32.75 in premarket trading.