Huntsman, Clariant in US$14b merger talks
NEW YORK: Huntsman Corp and Clariant AG are in talks to merge in a transatlantic deal that will create a chemicals company valued at about US$14 billion (RM60.26 billion), said a source.
The companies were discussing a deal in which Clariant would own about 52 per cent of the new entity to be called HuntsmanClariant, said the source.
Huntsman chief executive officer Peter Huntsman would hold that title for the combined company and the board would be evenly split, with Clariant chief executive officer (CEO) Hariolf Kottmann as chairman.
An agreement between Huntsman and Clariant would add to an already historic level of deals in the industry as CEOs seek to bolster tepid sales growth with acquisitions.
Global chemical companies have more than US$300 billion in mergers and acquisitions planned, according to a report by global management consulting company 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.
The talks were reported earlier by the Wall Street Journal.
The merged businesses could probably cut costs by US$500 million a year, said Hassan Ahmed, an analyst at Alembic Global Advisers.
Clariant businesses such as plastics, coatings and personal care would complement Huntsman divisions such as polyure-thanes and performance products, he said.
The transaction would give Clariant more sales in North America, where fracking has provided chemical makers with cheap raw materials, and in fastgrowing China, said Ahmed.
Huntsman generated 11 per cent of revenue in China last year. Bloomberg