Dow Chemical, a leading chemical manufacturer, acquired Rohm and Haas Company for $15.3 billion. While Dow has

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Dow Chemical, a leading chemical manufacturer, acquired 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 would 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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