Clariant and Huntsman to Combine in Merger of Equals

Clariant and Huntsman Corporation 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.

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 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.”            

“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.

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, TX.
• Dual stock exchange direct listing on the SIX Swiss Exchange and the New York Stock Exchange.

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 $3.5 billion of value creation from approximately $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.

Corporate Governance

The combined company, incorporated in Switzerland, will be governed by a Board of Directors with equal representation from Clariant and Huntsman and will follow Swiss Corporate Governance standards. Kottmann shall become chairman of the Board of HuntsmanClariant. Huntsman will become CEO of HuntsmanClariant. Jon Huntsman, founder and chairman of Huntsman, shall become chairman emeritus and board member of HuntsmanClariant. The merger enjoys strong commitment from both Clariant and Huntsman family shareholders. The company will be listed on the SIX Swiss Exchange and the New York Stock Exchange. HuntsmanClariant will use IFRS, and beginning in Q1 2018 will report in USD and will start filing 10Qs and 10Ks consistent with SEC requirements.

Timing

The transaction is targeted to close by year end 2017, subject to Clariant and Huntsman shareholder approvals, regulatory approvals and other customary closing conditions. Clariant and Huntsman are confident that the required regulatory approvals can be obtained in a timely manner.