SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C.
_________________
FORM 8-K
CURRENT REPORT
PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
_________________
June 21, 1999
(Date of earliest event reported)
ROHM AND HAAS COMPANY
(Exact name of registrant as specified in charter)
_____________________
Delaware
(State of Incorporation)
1-3507
(Commission File Number)
23-1028370
(IRS Employer Identification No.)
100 Independence Mall West, Philadelphia, Pennsylvania 19106
(Address of Principal Executive Offices)(Zip Code)
(215) 592-3000
(Registrant's Telephone Number, Including Area Code)
___________________________________________________
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Item 2. Acquisition or Disposition of Assets
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The merger (the "Merger") of Morton Acquisition Corp. ("Merger
Sub"), a wholly owned subsidiary of Rohm and Haas Company (the "Company"),
with and into Morton International, Inc. ("Morton") was completed on June 21,
1999. As a result of the Merger, Morton has become a wholly owned subsidiary
of the Company. In the Merger, each share of common stock par value $1.00
per share, of Morton (other than shares held in the treasury of Morton and
each share owned by the Company or Merger Sub, in each case immediately prior
to the Effective Time, which were canceled and retired without any conversion
thereof) issued and outstanding immediately prior to such consummation was
canceled, extinguished and converted into the right to receive (A) .368776 of
a share of common stock, par value $2.50 per share ("Company Common Stock"),
of the Company and (B) cash in an amount equal to $24.55. The Company will
issue, in aggregate, approximately 45.1 million shares of Company Common
Stock and pay approximately $3.4 billion in cash merger consideration.
The cash portion of the consideration to be paid in the Merger will be funded
by the Company with a combination of internally generated funds and external
financing.
The basic terms of the Merger were described in the Joint Proxy
Statement/Prospectus of Morton and the Company dated May 21, 1999, which was
included in the Company's Registration Statement on Form S-4 (No. 333-78993).
Morton's primary business is the manufacturing of specialty
chemicals and salt products. The Company currently intends to continue such
business.
Copies of the Company's press releases announcing the results
of the stockholder votes and the completion of the Merger are filed as exhibits
hereto and incorporated by reference herein.
Item 5. Other Events.
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The Company has agreed to settle a claim by the buyer of the
Company's interest in the AtoHaas joint venture covering the value of certain
joint venture assets for amounts up to $23.5 million.
Item 7. Financial Statements, Pro Forma Financial Information and Exhibits.
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(a) Financial Statements of Business Acquired.
1. Audited consolidated balance sheet of Morton and subsidiaries
as of June 30, 1998 and June 30, 1997, and the related
consolidated statements of income and cash flows for each of
the three years in the period ended June 30, 1998.
(incorporated by reference to Morton's Annual Report on Form
10-K for the fiscal year ended June 30, 1998)
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2. Unaudited consolidated balance sheet of Morton and
subsidiaries as of March 31, 1999, unaudited consolidated
statements of income and retained earnings for the nine months
ended March 31, 1999 and March 31, 1998 and unaudited
consolidated statements of cash flows for the nine months
ended March 31, 1999 and March 31, 1998. (incorporated by
reference to Morton's Quarterly Report on Form 10-Q for the
quarterly period ended March 31, 1999)
(b) Pro Forma Financial Information.
Unaudited pro forma combined balance sheet as of March 31, 1999 and the
unaudited pro forma combined statements of income for the year ended December
31, 1999 and the three months ended March 31, 1999. (incorporated by
reference to pages 78-95 of the Registration Statement on Form S-4 ( No. 333-
78993), filed May 21, 1999)
(c) Exhibits.
(99.1) Press Release dated June 21, 1999.
(99.2) Press Release dated June 21, 1999.
(99.3) Audited consolidated balance sheet of Morton and subsidiaries
as of June 30, 1998 and June 30, 1997, and the related
consolidated statements of income and cash flows for each of
the three years in the period ended June 30, 1998.
(incorporated by reference to pages 24-37 of Exhibit 13(a) to
Morton's Annual Report on Form 10-K for the fiscal year ended
June 30, 1998)
(99.4) Unaudited consolidated balance sheet of Morton and
subsidiaries as of March 31, 1999, unaudited consolidated
statements of income and retained earnings for the three
months ended March 31, 1999 and March 31, 1998 and for the
nine months ended March 31, 1999 and March 31, 1998 and
unaudited consolidated statements of cash flows for the nine
months ended March 31, 1999 and March 31, 1998. (incorporated
by reference to pages 3-7 of Morton's Quarterly Report on Form
10-Q for the quarterly period ended March 31, 1999)
(99.5) Unaudited pro forma combined balance sheet as of March 31,
1999 and the unaudited pro forma combined statements of income
for the year ended December 31, 1999 and the three months
ended March 31, 1999. (incorporated by reference to pages 78-
95 of the Registration Statement on Form S-4 ( No. 333-78993),
filed May 21, 1999)
(99.6) Consent of Ernst & Young LLP
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SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of
1934, the Registrant has duly caused this Report to be signed on its behalf
by the undersigned hereunto duly authorized.
ROHM AND HAAS COMPANY
By: /s/ Robert P. Vogel
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Name: Robert P. Vogel
Title: Vice President and General
Counsel
Date: June 28, 1999
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EXHIBIT INDEX
Exhibit No. Exhibit
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(99.1) Press Release dated June 21, 1999
(99.2) Press Release dated June 21, 1999
(99.3) Audited consolidated balance sheet of Morton and
subsidiaries as of June 30, 1998 and June 30, 1997, and
the related consolidated statements of income and cash
flows for each of the three years in the period ended June
30, 1998. (incorporated by reference to pages 24-37 of
Exhibit 13(a) to Morton's Annual Report on Form 10-K for
the fiscal year ended June 30, 1998)
(99.4) Unaudited consolidated balance sheet of Morton and
subsidiaries as of March 31, 1999, unaudited consolidated
statements of income and retained earnings for the nine
months ended March 31, 1999 and March 31, 1998 and
unaudited consolidated statements of cash flows for the
nine months ended March 31, 1999 and March 31, 1998.
(incorporated by reference to pages 3-7 of Morton's
Quarterly Report on Form 10-Q for the quarterly period
ended March 31, 1999)
(99.5) Unaudited pro forma combined balance sheet as of March 31,
1999 and the unaudited pro forma combined statements of
income for the year ended December 31, 1999 and the three
months ended March 31, 1999. (incorporated by reference
to pages 78-95 of the Registration Statement on Form S-4
(No. 333-78993), filed May 21, 1999)
(99.6) Consent of Ernst & Young LLP
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ROHM AND HAAS JOINS RANKS OF THE WORLD'S LARGEST
SPECIALITY CHEMICAL COMPANIES
Sales of $6.5 billion;
Products improve quality of life in many everyday uses
Philadelphia, PA, June 21, 1999 -- Rohm and Haas (NYSE:ROH) shareholders have
approved proposals which will create a $6.5 billion specialty chemical
company later today after appropriate legal filings are made to complete the
acquisition of Morton International, a Chicago-based manufacturer of
specialty chemicals and salt.
"This is a remarkable day for Rohm and Haas," said Chairman and CEO J.
Lawrence Wilson at the company's annual meeting of shareholders in
Philadelphia. "By the end of this day, Rohm and Haas will have a market
capitalization, revenues and level of profitability that place us among the
world's top three specialty chemical companies."
Rohm and Haas announced its intention to acquire Morton International on
February 1st of this year for a combination of cash and stock totaling $4.9
billion.
Morton's specialty chemical products are found in food packaging, computer
circuit boards, car finishes and furniture coatings, among other things. Its
Morton Salt Umbrella Girl and "When it rains, it pours" (Registered
Trademark) slogan are household symbols in the United States, as is the
Morton Windsor Salt name in Canada and the La Baleine brand name in France.
Morton International reported $2.5 billion in worldwide revenue in fiscal
year 1998.
Rohm and Haas shareholders approved an increase in the number of common
shares from 200 to 400 million, and to use a portion of those shares for the
acquisition. In Chicago this morning, Morton shareholders also voted to
approve the acquisition.
Once appropriate legal papers are filed in the state of Delaware and Indiana,
Rohm and Haas will give $24.55 in cash and .368776 of a share of its common
stock for each Morton common share.
President J. Michael Fitzpatrick re-iterated the new Rohm and Haas's
intention to grow faster and become even more efficient than either of the
previously existing independent firms. "As separate companies, Rohm and Haas
and Morton had the capability to increase sales revenue at above GDP rates -
in the 4 to 5 percent range. As a combined company, you can expect us to
report sales growth in the 6 to 8 percent range, beginning in 2001, as long
as economic conditions remain stable."
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Fitzpatrick also committed the company to a $300 million reduction in
operating costs by the end of next year. He said the bulk of the savings
would come from infrastructure adjustments, more efficient raw material and
packaging purchases, and improvements in the company's manufacturing network.
Vice Chairman Rajiv L. Gupta, assured shareholders that the new company is
well positioned to take advantage of the globalization and specialization
trends dominating the industry today.
He pointed out that the combined Rohm and Haas will begin with operations in
25 countries, with good manufacturing, technical services, selling and
distribution channels firmly established in all four geographic regions.
While more than 80 percent of the company's sales occur today in North
America and Europe, Gupta stated, "We have the perfect entree routes to
quickly bring the acquired technology and products into Latin American and
Asia-Pacific countries."
The quality of the new company's product portfolio is excellent, according to
Gupta, with "more than 90 percent performing at or above target levels."
However, he said, having a high-performance product portfolio is not enough.
"Companies today must focus on specific areas of expertise and then exploit
those capabilities everywhere they can."
Gupta told the group that, while all aspects of the company's portfolio
remain important to the company's overall success, Rohm and Haas will pay
special attention to those segments of the portfolio that have the following
"franchise" characteristics:
Size: Annual sales of $500 million or more;
Market position: Holding first or second place in markets in which they
compete;
Full-range of products and services: which enable them to become "one-
stop shops" for customers' needs;
An emphasis on technology development, and
Excellent reputations within the market: so good that they attract and
retain the best talent in the field;
Gupta cited five business segments that meet these franchise criteria:
Coatings: A $1.5 billion segment with the full-range of technology to
make paints and coatings for the interior and exterior walls, wood,
metals, plastics, and ceramic surfaces of all kinds;
Adhesives and sealants: A $650 million segment which has been created
because of the excellent match between technology offered by Morton
and Rohm and Haas;
Electronic Materials: With $1 billion in sales (including the
contribution of the Rodel affiliate), this segment offers a fully
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integrated, fully compatible line of products for the semiconductor
and printed wiring board industries;
Plastic Additives: Which offers a $500 million portfolio of processing
aids, impact modifiers, stabilizers and lubricants, and
Salt: An $800 million business that includes some of the world's best
known brand names for grocery salt, including Morton, Windsor, La
Baleine and Fleur de Sel de Camargue.
Also at the shareholders meeting, Larry Wilson, who had previously said he
would retire before the end of the year, set a retirement date of September
30th. Wilson said, "By that time, the new management team will have been in
place for about a year. Mike Fitzpatrick and Raj Gupta [who will succeed
Wilson as Chairman of the company] have already proven themselves as
outstanding leaders of this group - clearly they are delivering superior
results." Gupta paid tribute to Wilson, noting among other things that Rohm
and Haas's total return to shareholders has been 460 percent since Wilson
became chairman in July 1988 -- far outstripping the average performance of
specialty chemical companies during that time.
In other actions at the meeting, Rohm and Haas shareholders approved a new
stock plan for the company and amended the company's charter to require that
all future stockholder-proposed actions be taken at shareholder meetings.
Shareholders also approved the company's 15-member slate of directors which,
for the first time in more than a decade, include two members of the Haas
Family. David W. Haas and Thomas W. Haas joined the board as representatives
of the company's largest shareholder group. Once the Morton acquisition is
completed, three Morton directors will join the Rohm and Haas board -- S. Jay
Stewart, Chairman and Chief Executive of Morton International (who will
become a Vice Chairman of Rohm and Haas); James R. Cantalupo, Vice Chairman
of McDonald's Corporation, and Richard L. Keyser, Chairman and CEO of W.W.
Grainger, Inc.
This press release contains statements that are forward looking. These
statements are based on current expectations and are subject to risks and
uncertainties. Actual results may vary.
# # #
For further information:
For investors: Eric Norris, 1-215-592-2664
For media: Laura Hadden, 1-215-592-3054
Editor's note: Key Facts about the new Rohm and Haas Company:
Sales revenue: $6.5 billion
Sites: 150 manufacturing and research sites in 25 countries
Employees: Approximately 23,000
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ROHM AND HAAS COMPLETES
ACQUISITION OF MORTON INTERNATIONAL
Philadelphia, PA, June 21, 1999 Rohm and Haas Company (NYSE:ROH) said it has
completed the acquisition of Morton International (NYSE:MII). The transaction
closed at the end of the day today, Monday, June 21, 1999.
Shareholders of both companies approved the acquisition at separate meetings
earlier today.
Rohm and Haas is a $6.5 billion speciality chemical company headquartered in
Philadelphia. It operates 150 manufacturing and research sites in 25 countries
and employs approximately 23,000 people worldwide.
# # #
For further information:
For investors: Eric Norris, 1-215-592-2664
For media: Laura Hadden, 1-215-592-3054
CONSENT OF INDEPENDENT AUDITORS
We consent to the incorporation by reference in the current report on Form 8-
K and in the Registration Statements on Form S-3 (Nos. 333-14017 and 333-
69541) and in Registration Statements on Form S-8 (Nos. 2-90736, 33-56842,
333-18879, 333-40877, 333-73437 and 333-78993) of Rohm and Haas Company of
our report dated July 29, 1998, with respect to the consolidated financial
statements and schedule of Morton International, Inc. incorporated by reference
in its Annual Report (Form 10-K) for the year ended June 30, 1998, filed with
the Securities and Exchange Commission.
/s/ Ernst & Young LLP
Chicago, Illinois
June 30, 1999
