Clariant and Huntsman Corporation jointly announced on 31 October 2107 that they have mutually terminated their proposed merger of equals. The decision was unanimously approved by the boards of directors of both companies. In a joint statement, Peter R Huntsman, president and CEO of Huntsman, and Hariolf Kottmann, CEO of Clariant, stated that they remain convinced that the proposed merger of equals as agreed to on 21 May 2017, would have been in the long-term best interests of all shareholders of both companies. Both are global specialty chemical companies that are also active in India.
However, given the continued accumulation of Clariant shares by investor White Tale Holdings and its opposition to the transaction, which is now supported by some other shareholders, they believe that there is simply too much uncertainty as to whether Clariant will be able to secure the two-thirds shareholder approval that is required to approve the transaction under Swiss law.
Under these circumstances the companies have jointly decided to terminate the merger agreement. The termination agreement foresees no payment of a break fee on either side. Peter Huntsman further commented, “We viewed this merger of equals as an opportunity to accelerate our downstream growth and for two great companies to become even better together. However, it is not the only option for Huntsman to create real and lasting value. Going forward, we will continue to create shareholder value by delivering on four objectives: Continued focus on growth and expanding margins in our differentiated and specialty businesses through both organic growth and appropriate bolt-on acquisitions; Consistent strong annual free cash flow and deleveraging, reaching investment grade metrics beginning in 2018; Monetization of the remaining Venator shares, further strengthening the balance sheet; and, Upon achieving investment grade metrics, return of additional value to shareholders.
“Our future has never looked brighter. The company’s balance sheet is stronger than it has ever been and will strengthen further as we continue to generate strong cash flow from our operations and monetize our Venator equity. We also look forward to wide scale improvement this year over the previous in earnings, growth and margin expansion.”