he HBS Case we will discuss takes us back to 1995; this is just a year after the devastating Mexican crisis that caused tribulations in other emerging markets. At the time Argentina was seen as a success story, as the government of Carlos Menem stabilized the Argentinean economy in the early 1990s; the country had low inflation and a fixed exchange rate against USD; while it was shaken by the Mexican crisis, it proved to be resilient. Like many other emerging market economies, Argentina is resourceful and promising; Dow executives thought they had a window of opportunity to invest in Argentina by acquiring PBB and possibly going further.  We will discuss various aspects of this acquisition in class tomorrow. Some questions we will consider are the following:

1. What is Dow Acquiring? Describe the target characteristics, the business, and its attractiveness to Dow.
2. What is the logic of acquisition from Dow's perspective? What is the argument for the acquisition? Can the argument convince the Dow board?  Discuss the potential benefits and risks.
3. The cash flows for PBB Ethylene Cracker were provided in Exhibit 9a of the case.  Given these cash flows, provide a framework for valuation. What are the distinctive valuation issues in this case? For instance, is this investment riskier than Dow's usual investments in developed economies such as UK or Germany?  What are risks that you can identify from Dow's perspective?  How would you address them? How should these be incorporated into valuation?
4. How much should Dow bid for Ethylene Cracker? 
5. Discuss your conclusions and take away from your analysis.

 I would like you to discuss these questions in breakout groups during the class and then have the main room discussion sharing perspectives.