Hunts­man, Clari­ant in US$14b merger talks

New Straits Times - - Business | World -

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

Har­i­olf Kottmann

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