Dow will pay $78 in cash for each Rohm & Haas share, 74 percent more than yesterday’s closing price. Financing includes equity investments of $3 billion by Warren Buffett’s Berkshire Hathaway Inc. and $1 billion by the Kuwait Investment Authority, Midland, Michigan-based Dow, the biggest U.S. chemical maker, said today in a statement. Berkshire will become Dow’s largest shareholder.

Dow, which raised prices for June and July more than 20 percent, faces a margin squeeze as rising oil prices cut profits from sales of polyethylene and Styrofoam, Chief Executive Officer Andrew Liveris said in an interview with Bloomberg Television. Rohm & Haas generated 31 percent of its 2007 profit from materials used to make electronics such as computer chips.

?EUR??,,????'?????<

The purchase also includes the assumption of $3.4 billion of net debt, Dow spokesman Chris Huntley said.

Dow fell $1.18, or 3.5 percent, to $32.78 as of 2:13 p.m. in New York Stock Exchange composite trading. The shares had declined 14 percent this year through yesterday. Philadelphia- based Rohm & Haas surged $29.25, or 65 percent, to $74.08.