US’ Huntsman, Swiss Clariant to merge via all-stock deal

(adds details, quotes from Huntsman, Clariant CEOs)

SINGAPORE (ICIS)–US’ Huntsman and Swiss Clariant have agreed to combine their businesses via an all-stock “merger of equals”, the specialty chemical companies said in a joint statement on Monday.

The merged company will be named HuntsmanClariant, in which the Swiss firm will have a 52% stake, while the US firm will hold the remaining 48%, they said.

Under the deal, Huntsman shareholders will receive 1.2196 shares in the merged HuntsmanClariant for each Huntsman share held. Each existing Clariant share, on the other hand, will remain outstanding as a share in the merged entity.

The merged firm has about $20bn in enterprise value at the time of the announcement.

HunstmanClariant will have a dual direct listing on the SIX Swiss Exchange and the New York Stock Exchange.

The merger, which was approved by the board of directors of the two companies, is expected to create more than $3.5bn in value through annual cost synergies of more than $400m, they said.

The transaction is targeted to close by the end of the year, subject to approval from the respective shareholders of the companies.

“Clariant and Huntsman are joining forces to gain much broader global reach, create more sustained innovation power and achieve new growth opportunities,” Clariant’s CEO Hariolf Kottmann said.

“Together, we will create a global leader in specialty chemicals with a combined balance sheet providing substantial financial strength and flexibility,” Huntsman’s president and CEO Peter Huntsman said.

HuntsmanClariant’s global headquarters will be in Pratteln, Switzerland, while its operational headquarters will be in The Woodlands, Texas, US.

Meanwhile, the planned initial public offering (IPO) of Huntsman’s pigments and additives business, Venator, will continue as planned in the summer of 2017, the companies said.

Huntsman and Clariant have little overlap in businesses, and this could help the deal receive approval from anti-trust regulators.

Huntsman derives a good portion of its income from its polyurethanes business. Its performance-products segment makes amines, surfactants and maleic anhydride (MA). The textile-effects segment makes textile chemicals dyes and digital inks.

Advanced materials makes epoxy resins. Huntsman has been using its expertise in epoxy resins and polyurethanes to develop composites.

Clariant, on the other hand, makes polymer additives, flame retardants, masterbatches and catalysts used in chemical processes. Other business units include functional minerals, pigments and oil-and-mining services.

Its industrial and consumer-specialties business unit serves end markets such as automotive fluids, aviation, construction chemicals, crop solution, gas treatment and heat-transfer fluids, as well as industrial and home care.

Clariant also has a new businesses unit, which concentrates on electronic materials, food ingredients, renewable chemicals and VitiSpheres. These are used to integrate active ingredients into cosmetics.

Additional reporting by Al Greenwood

Picture: Huntsman office