26 June 2007 17:57 [Source: ICIS news]
LONDON (ICIS news)--Basell and Huntsman are likely to be run in tandem, Huntsman CEO Peter Huntsman said on Tuesday.
Management changes at the firm are unlikely on completion of the Access Industries $9.4bn buyout of the ?xml:namespace>
“It’s business as usual,” he said. “There are commonalities in the businesses and we’ll be running Basell and Huntsman in tandem.”
Huntsman is clearly pleased with the deal struck for the business his father started in 1983 with the highly leveraged acquisition of a small polystyrene unit. The Huntsman family is likely to receive $1.5bn on completion of the transaction.
Jon Huntsman, Huntsman’s founder and chairman of Huntsman Corporation, said the proceeds would be used to help find cures for cancer.
The $25.25/share offer was 35% over Huntsman’s closing price on Monday. “We’re quite contented for both our shareholders and our associates,” Peter Huntsman said.
Len Blavatnik’s Access Industries has taken a hands-off approach with Basell since its acquisition in 2005 but the polyolefins major has been driven hard by its management team. Running the combination of Basell and Huntsman provides synergies for both but little overlap along product lines. The companies’ combined sales would be $26bn.
Huntsman derives most of its profits from its polyurethanes business, but runs differentiated materials and textile effects and performance products lines. The company is the largest producers of amines and epoxy formulations and aims to work closely with customers leveraging technology into new offerings.
“We’ve done a lot of bolt-on acquisitions,” Peter Huntsman said, referring to the shift in the Huntsman portfolio away from commodity chemicals and towards more differentiated products. “We’ve shored up our company.”
Strong cashflows and divestments have helped the company pay down debt and become more attractive: Huntsman agreed to sell its
The current Huntsman businesses are “all about technology and customer relationships”, he said. Running an epoxy business for aerospace customers is different from running an ethylene cracker, he suggested.
“We’ve always been comfortable with the commodity side of the business, but you have to be confident and have a large position.
“Regional commodity players will do well during parts of the cycle, but when the wind blows against them they lose money.
“Basell has great technology and a global footprint,” added Peter Huntsman, saying that the cashflow from the two businesses is “very strong”.
Basell’s polypropylene business and many Huntsman products are growing well.
“You have good avenues for growth in the Middle East,
The company is forging strong relationship with customers and others in fast-growing parts of the world, Peter Huntsman said.
“For the vast majority of our products, as you grow you have to consider worldscale expansions,” he said.
The shift of the business towards the east is marked, Peter Huntsman suggested. "By the end of 2008 we will have more associates [employees] in
Huntsman is also tapping into this growth with production facilities in
The merger of Basell and Huntsman creates one of the largest chemical companies in the world, Peter Huntsman said in an earlier statement.
“I am confident that this combination will allow us to even more effectively pursue our underlying business strategies and continue to provide rewarding opportunities for our associates,” he added.
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