Huntsman Proceeds With Clariant Deal, To Address FTC Concerns
Zacks Investment Research | Aug 15, 2017 09:51PM ET
Huntsman Corporation (NYSE:HUN) recently announced that it is on track toward satisfying the regulatory approval conditions required to close its “merger of equals” deal with Clariant AG.
The U.S. Federal Trade Commission (FTC) has directed Huntsman to provide information relating to only two products, a polyetheramine product (used in certain construction and paint/ additive and ink applications) and sodium isethionate (used in personal care products such as shampoos and soap).
According to Huntsman, these products accounted for less $20 million of its total revenues in the United States in 2016. The company is confident of satisfying all FTC concerns related to the merger and is also optimistic about closing the deal by the end of the year.
Huntsman and Clariant have agreed to combine in an all-stock deal that will create a leading chemical specialty company with revenues of roughly $13.2 billion and enterprise value of about $20 billion. This merger of equals will create a formidable industry player that will help the companies grow their foothold in high-growth markets, cut operating costs and expand margins.
The merged entity will be named HuntsmanClariant, where Huntsman’s shareholders will hold 48% interest in the merged entity and the remaining 52% will be owned by Clariant.
The merged entity will leverage shared knowledge in sustainability and joint innovation platform, enabling the development of new products to drive shareholders’ value and deliver superior returns. The merged entity will speed up value creation for shareholders through robust combination of products, technology and talent. This will translate into annual cost synergies of approximately $400 million and generate over $3.5 billion in value creation.
Shares of Huntsman have lost 4.5% of its value in the last three months versus the 1.5% growth of its Zacks Investment Research
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