Clariant in $6bn stock deal for Huntsman
Clariant has agreed to buy Huntsman for about $6.4bn in stock, cementing a deal that had developed over several years and extending a record run of consolidation in the global chemicals industry.
"The combined company should have higher margins, a more specialty-chemical oriented earnings profile and lower financial leverage," James Sheehan, an analyst at Suntrust Robinson Humphrey, said in a note.
A Swiss base also provides $25m of annual tax benefits, he said.
The combined board will have equal representation from the two companies, with Clariant CEO Hariolf Kottman becoming chairman and Huntsman founder and chairman Jon Huntsman serving as chairman emeritus.
Huntsman CEO Peter Huntsman, the founder's son, will hold the same position in the new HuntsmanClariant.
The combination adds to an already historic level of deals in the industry as CEOs seek to bolster tepid sales growth.
Global chemical companies have more than $300bn in mergers and acquisition planned, according to a report by AT Kearney published in March.
That level is more than twice the previous all-time high set at the end of 2015, according to the management consulting firm.
Huntsman holders will get 1.2196 shares in the new company for each share they own, with Muttenz, Switzerland-based Clariant emerging with a 52pc stake, the two companies said in a statement.
The combination is expected to generate more than $400m in annual cost savings, leading to $3.5bn in value creation, they said. (Bloomberg)