Clariant and Huntsman Merge to Form US$20 Billion Specialty Chemical Giant

22 May 2017 --- Two major chemical corporations, Swiss-based Clariant and US Huntsman Corporation have announced that both Boards of Directors unanimously approved a definitive agreement to combine in a merger of equals through an all-stock transaction - and the merged company will be called HuntsmanClariant.

On a pro forma 2016 basis, the combination of both companies will create a leading global specialty chemical company with sales of approximately US$13.2 billion, an adjusted EBITDA of US$2.3 billion and a combined enterprise value of approximately US$20 billion at announcement.

It may be a little early to assess what impact the merger will have on the food industry, however according to both companies, the new combined entity will benefit from each other’s strengths and have a significantly improved growth profile in highly attractive end markets and geographies.

Both CEO’s have welcomed the merger they say will create a “global leader in specialty chemicals.”

HuntsmanClariant will leverage shared knowledge in sustainability and boast a much stronger joint innovation platform which will enable the development of new products in order to deliver superior returns and drive shareholder value.

“This is the perfect deal at the right time. Clariant and Huntsman are joining forces to gain much broader global reach, create more sustained innovation power and achieve new growth opportunities,” said Hariolf Kottmann, CEO of Clariant. “This is in the best interest of all of our stakeholders. Peter Huntsman and I share the same strategic vision and I look forward to working with him.”

“I could not be more enthusiastic about this merger and look forward to working closely with Hariolf Kottmann, a man I have admired and trusted for the past decade. We also look forward to a close association with his immensely talented colleagues around the world. Together, we will create a global leader in specialty chemicals with a combined balance sheet providing substantial financial strength and flexibility,” added Peter R. Huntsman, President and CEO of Huntsman.

The current Huntsman Corporation is an American multinational manufacturer and marketer of chemical products for consumers and industrial customers. Huntsman manufactures assorted polyurethanes, performance products, and pigments for customers like BMW, GE, Chevron, Procter & Gamble, and Unilever.

Clariant is a speciality chemicals company, formed in 1995 as a spin-off from former pharmaceutical company Sandoz. The company is focused on four business areas: care chemicals (consumer and industrial); catalysis; natural resources (oil & mining, minerals); and plastics & coatings. Headquartered near Basel, Switzerland, the public company encompasses 110 operating companies in 53 countries and has major manufacturing sites in Europe, North America, South America, China and India.

Highlights of the all-stock merger of equals transaction include Clariant shareholders: 52%, Huntsman shareholders: 48%, Huntsman shareholders will receive 1.2196 shares in HuntsmanClariant for each Huntsman share (each existing Clariant share will remain outstanding as a share in HuntsmanClariant), Board of Directors with equal representation from Clariant and Huntsman.

The new global headquarters will be in Pratteln, Switzerland and operational headquarters in The Woodlands, Texas. And there will be dual stock exchange direct listing on the SIX Swiss Exchange and the New York Stock Exchange.

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 US$3.5 billion of value creation from approximately US$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% of total combined 2016 revenue with one-time costs up to US$500 million. There will also be additional cash-tax savings.

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

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