Hunstman And Clariant : Two Gi­ants that Im­pact Den­ims An­nounce a Merger of Equals

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US based Hunts­man Corp and Switzer­land’s Clariant AG com­bine to cre­ate a $ 14 bil­lion chem­i­cal pow­er­house.

US based Hunts­man Corp and Switzer­land’s Clariant AG an­nounced that they are com­bin­ing to cre­ate a chem­i­cal man­u­fac­turer with a mar­ket value of more than $14 bil­lion, af­ter years of ten­ta­tive mu­tual ap­proaches.

The two com­pa­nies in­formed 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.

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, 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,” he added.

Peter R. Hunts­man, Pres­i­dent and

CEO, 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.”

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 run­rate 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 per­cent of to­tal com­bined 2016 rev­enue with one-time costs up to $500 mil­lion. There will also be ad­di­tional cash-tax sav­ings. 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.

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.

Fash­ion Busi­ness

Har­i­olf Kottmann & Peter R. Hunts­man shak­ing hands

Har­i­olf Kottmann, CEO, Clariant

Peter R. Hunts­man, Pres­i­dent and CEO, Hunts­man

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