Mining chemicals: Clariant and Huntsman to combine in merger of equals

Posted by Daniel Gleeson on 22nd May 2017

As the IM June issue goes to press with the article on mining chemicals, Clariant and Huntsman Corp today announced that their Boards of Directors unanimously approved a definitive agreement to combine in a merger of equals through an all-stock transaction. The merged company will be named HuntsmanClariant. 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.

  • Merger of equals to create a leading global specialty chemical company with approximately $20 billion enterprise value at announcement
  • More than $3.5 billion value creation through annual cost synergies in excess of $400 million
  • Enhanced returns from improved growth profile in highly attractive end markets and key geographies such as the USA and China
  • Opportunities for stronger joint innovation platforms and shared knowledge in sustainability
  • Stronger balance sheet and cash flow generation; plan to continue Clariant’s attractive dividend policy
  • Transaction targeted to close by year end 2017
  • Previously announced IPO of Huntsman’s Pigments and Additives business (Venator) to continue as planned in summer 2017

The combined entity will benefit from each other’s strengths. It will have a significantly improved growth profile in highly attractive end markets and geographies. HuntsmanClariant 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.

“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.”

Huntsman, President and CEO of Huntsman, commented: “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.”

Transaction highlights:

  • All-stock merger of equals transaction
  • Clariant shareholders: 52%, Huntsman shareholders: 48%
  • Huntsman shareholders 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
  • Global Headquarters in Pratteln, Switzerland, Operational Headquarters in The Woodlands, Texas
  • Dual stock exchange direct listing on the SIX Swiss Exchange and the New York Stock Exchange.