Huntsman Completes Sale Of Two Chemical Units To Indorama
Zacks Investment Research | Jan 05, 2020 08:21PM ET
Huntsman Corporation (NYSE:HUN) announced that it completed the divestiture of its chemical intermediates businesses, including PO/MTBE, and its surfactants businesses to Indorama Ventures. The company announced the deal in August 2019.
The transaction is valued at around $2 billion, which comprises a cash purchase price of $1.93 billion along with the transfer of up to $76 million in net underfunded pension as well as other post-employment benefit liabilities. Notably, the cash purchase price includes estimated adjustments to the working capital purchase price.
The final purchase price is subject to customary post-closing adjustments. Further, net cash proceeds are expected to be just below $1.6 billion.
Per Huntsman, the transaction significantly lowers its capital-intensive upstream asset base, strengthens its already strong balance sheet, and enables it to further invest and expand its downstream businesses. Moreover, the transaction expands the company’s opportunity and flexibility for select strategic and accretive acquisitions, and ongoing opportunistic repurchases of its shares.
Notably, the company, in August 2019, noted that the divestiture will enable it to generate more stable and consistent margins as well as strong free cash flow.
Huntsman's shares have gained 11.7% in the past year against the Zacks Investment Research
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