German China India

M&A: Speciality Chemicals

Clariant and Huntsman to Combine Their Activities

| Editor: Wolfgang Ernhofer

Peter R. Huntsman (left), President and CEO of Huntsman, and Hariolf Kottmann, CEO of Clariant, want a merger of equals to create a leading global specialty chemical company with approximately $20 billion enterprise value at announcement.
Peter R. Huntsman (left), President and CEO of Huntsman, and Hariolf Kottmann, CEO of Clariant, want a merger of equals to create a leading global specialty chemical company with approximately $20 billion enterprise value at announcement. (Bild: Giorgia Müller / Clariant)

Next M&A bombshell in chemical industry: Clariant and Huntsman Corporation announced that their Boards of Directors unanimously approved a definitive agreement to combine in a merger of equals through an all-stock transaction.

Muttenz/Switzerland – The merged chemical company will be named Huntsman-Clariant. On a pro forma 2016 basis, the combination of both companies will create a leading global specialty chemical company with sales of approximately $13.2 billion, an adjusted Ebitda of $2.3 billion and a combined enterprise value of approximately $20 billion at announcement.

The combined entity will benefit from each other’s strengths, the companies said. It will have a significantly improved growth profile in highly attractive end markets and geographies. Huntsman-Clariant will leverage shared knowledge in sustainability and boast a much stronger joint innovation platform. This will enable the development of new products in order to deliver superior returns and drive shareholder value.

Value Creation

The new company will accelerate value creation for shareholders through a more robust combination of technology, products and talent. The combined company expects to realize more than $3.5 billion of value creation from approximately $400 million in annual cost synergies. The full synergy run-rate will be achieved within two years of closing. These synergies will be realized by reducing operational costs and improving procurement. The targeted synergies represent roughly 3 percent of total combined 2016 revenue with one-time costs up to $500 million. There will also be additional cash-tax savings.

Corporate Governance

The combined company, incorporated in Switzerland, will be governed by a Board of Directors with equal representation from Clariant and Huntsman and will follow Swiss Corporate Governance standards. Hariolf Kottmann, current Clariant CEO, shall become Chairman of the Board of Huntsman-Clariant. Peter Huntsman, current Huntsman President and CEO, will become CEO of Huntsman-Clariant. Jon Huntsman, founder and Chairman of Huntsman, shall become Chairman Emeritus and board member of Huntsman-Clariant. The merger enjoys strong commitment from both Clariant and Huntsman family shareholders. The company will be listed on the SIX Swiss Exchange and the New York Stock Exchange. Huntsman-Clariant will use IFRS, and beginning in Q1 2018 will report in USD and will start filing 10Qs and 10Ks consistent with SEC requirements.

The transaction is targeted to close by year end 2017, subject to Clariant and Huntsman shareholder approvals, regulatory approvals and other customary closing conditions. Clariant and Huntsman are confident that the required regulatory approvals can be obtained in a timely manner.

Comments are being loaded ....

Leave a comment

The comment is checked by an editor and will be released soon.

  1. Avatar
    Avatar
    Edited by at
    Edited by at
    1. Avatar
      Avatar
      Edited by at
      Edited by at

Comments are being loaded ....

Report comment

Kommentar Freigeben

Der untenstehende Text wird an den Kommentator gesendet, falls dieser eine Email-hinterlegt hat.

Freigabe entfernen

Der untenstehende Text wird an den Kommentator gesendet, falls dieser eine Email-hinterlegt hat.

copyright

This article is protected by copyright. You want to use it for your own purpose? Infos can be found under www.mycontentfactory.de (ID: 44707018 / Business & Economics)