Switzerland's Clariant, Huntsman of US in chemicals merger
- Author: Zachary Reyes May 24, 2017,
May 24, 2017, 9:58
Growth in the chemicals industry has slowed down over the past few years and there's been increasing consolidation in the sector as a means of cutting costs. The company attributed that revenue gain to relatively strong growth in Asia, the Middle East and Africa, which helped to offset a weaker performance in North America, Europe and Latin America. Clariant makes aircraft de-icing fluids, ingredients for pesticides and plastic colouring.
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Also commenting on the transaction, Kottmann said: "This is the flawless deal at the right time we are joining forces to gain much broader global reach, create more sustained innovation and achieve new growth opportunities". Clariant's home base in Pratteln, Switzerland, will be the new firm's headquarters, and operations will be in The Woodlands, Texas, where Huntsman is based.
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).
Likewise Clariant has seen its financial results improve as it has shifted to high-margin specialty chemicals. In March, Huntsman said it was evaluating other options, including a merger, to increase shareholder value.
Interest in major cross-border deals was underscored earlier this year when Kraft Heinz Co KHC.O made a surprise $143 billion bid for Unilever ULVR.L UNc.AS , only to withdraw it less than 48 hours later, while USA healthcare giant Johnson & Johnson JNJ.N clinched Swiss biotech company Actelion ATLN.S in a $30 billion all-cash deal.
"We are probably more open to the idea of a potential merger than we would have been in the past", Huntsman said in a previous interview.
Mr. Huntsman told reporters, "Hariolf and I had discussions as friends and as business colleagues".
The overall value of cross-border M&A deals between the US and Europe is up 82 percent on the same period a year ago, according to Thomson Reuters data, and the highest over the same timeframe since at least 2007. He divested underperforming businesses including textile and paper chemicals in 2012 and placed more responsibility with lower level managers for faster decision-making. Huntsman will retain a 40% stake in the new company.
Peter Huntsman has said that any mergers or acquisitions didn't necessarily have to wait for the Venator deal to finalize.
WOODLANDS, Texas-An on-again, off-again merger of Huntsman Corp. and Clariant International Ltd. looks like it will finally come to fruition.
Among them, W.R. Grace, which competes with Clariant in process catalysts that speed up throughput of petrochemical reactors, split itself into two listed companies past year, spinning off GCP Applied Technologies GCP.N .