15 December 2008 04:48 [Source: ICIS news]
By Pearl Bantillo
SINGAPORE (ICIS news)--US chemicals producer Huntsman has settled for $1bn (€750m) to end its controversial multi-billion dollar merger deal with rival Hexion, but the legal action against Credit Suisse and Deutsche Bank remains active, the company said on Monday.
Hexion and its parent - private equity firm Apollo Global Management LLC will have to pay Huntsman at least half of the damages on or before the end of the year, with the balance expected to be settled in end-March 2009 at the latest, Huntsman said.
"It puts to an end the six month disagreement and distraction between our companies. As the majority stakeholder in Hexion and now an investor in Huntsman, we look forward to both companies traversing this economic cycle and prospering," said Leon Black, chairman of Apollo.
“We are happy to be resolving this situation in the best interest of our investors,” he said.
While the courts ordered that the merger proceed as planned, Credit Suisse and Deutsche Bank refused to provide the required $10bn funding in October.
"Our associates, customers and suppliers can now put the uncertainty concerning the outcome of the merger with Hexion behind them," said Peter Huntsman, president and CEO of Huntsman, in a statement.
“Receipt of these proceeds will enhance the strength of Huntsman's balance sheet and better position our company to prosper during the current turbulence in the global economy,” Huntsman said.
The settlement also resolves Huntsman's pending claims against Apollo and its affiliates related to the company’s prior merger deal with Basell AF. Huntsman had foregone the deal with Basell to pursue the merger with Hexion in July last year.
Huntsman’s lawsuit against Credit Suisse and Deutsche Bank, meanwhile, remains active and is scheduled for jury trial on 11 May 2009 in ?xml:namespace>
“We remain focused on preparing for our May jury trial against the banks," said Huntsman founder and executive chairman Jon Huntsman.
“We must continue to pursue our multi-billion dollar
($1 = €0.75)
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