- Merger of equals to create a leading global specialty chemical company with approximately $20 billion enterprise value at announcement
- More than $3.5 billion value creation through annual cost synergies in excess of $400 million
- Enhanced returns from improved growth profile in highly attractive end markets and key geographies such as the United States and China
- Opportunities for stronger joint innovation platforms and shared knowledge in sustainability
- Stronger balance sheet and cash flow generation; plan to continue Clariant’s attractive dividend policy
- Transaction targeted to close by year end 2017
- Previously announced IPO of Huntsman’s Pigments and Additives business (Venator) to continue as planned in summer 2017
Clariant and Huntsman Corporation announced that their Boards of Directors unanimously approved a definitive agreement to combine in a merger of equals through an all-stock transaction.
The merged company will be named HuntsmanClariant. On a pro forma 2016 basis, the combination of both companies will create a leading global specialty chemical company with sales of approximately $13.2 billion, an adjusted EBITDA of $2.3 billion and a combined enterprise value of approximately $20 billion at announcement.
The combined entity will benefit from each other’s strengths. It will have a significantly improved growth profile in highly attractive end markets and geographies. HuntsmanClariant will leverage shared knowledge in sustainability and boast a much stronger joint innovation platform. This will enable the development of new products in order to deliver superior returns and drive shareholder value.
“This is the perfect deal at the right time. Clariant and Huntsman are joining forces to gain much broader global reach, create more sustained innovation power and achieve new growth opportunities,” said Hariolf Kottmann, CEO of Clariant. “This is in the best interest of all of our stakeholders. Peter Huntsman and I share the same strategic vision and I look forward to working with him.”
Peter R. Huntsman, President and CEO of Huntsman, commented: “I could not be more enthusiastic about this merger and look forward to working closely with Hariolf Kottmann, a man I have admired and trusted for the past decade. We also look forward to a close association with his immensely talented colleagues around the world. Together, we will create a global leader in specialty chemicals with a combined balance sheet providing substantial financial strength and flexibility.”
- All-stock merger of equals transaction
- Clariant shareholders: 52%, Huntsman shareholders: 48%
- Huntsman shareholders receive 1.2196 shares in HuntsmanClariant for each Huntsman share (each existing Clariant share will remain outstanding as a share in HuntsmanClariant)
- Board of Directors with equal representation from Clariant and Huntsman
- Global Headquarters in Pratteln, Switzerland, Operational Headquarters in The Woodlands, Texas
- Dual stock exchange direct listing on the SIX Swiss Exchange and the New York Stock Exchange
The new company will accelerate value creation for shareholders through a more robust combination of technology, products and talent. The combined company expects to realize more than $3.5 billion of value creation from approximately $400 million in annual cost synergies. The full synergy run-rate will be achieved within two years of closing. These synergies will be realized by reducing operational costs and improving procurement. The targeted synergies represent roughly 3 percent of total combined 2016 revenue with one-time costs up to $500 million. There will also be additional cash-tax savings.
The combined company, incorporated in Switzerland, will be governed by a Board of Directors with equal representation from Clariant and Huntsman and will follow Swiss Corporate Governance standards. Hariolf Kottmann, current Clariant CEO, shall become Chairman of the Board of HuntsmanClariant. Peter Huntsman, current Huntsman President and CEO, will become CEO of HuntsmanClariant. Jon Huntsman, founder and Chairman of Huntsman, shall become Chairman Emeritus and board member of HuntsmanClariant. The merger enjoys strong commitment from both Clariant and Huntsman family shareholders. The company will be listed on the SIX Swiss Exchange and the New York Stock Exchange. HuntsmanClariant will use IFRS, and beginning in Q1 2018 will report in USD and will start filing 10Qs and 10Ks consistent with SEC requirements.
The transaction is targeted to close by year end 2017, subject to Clariant and Huntsman shareholder approvals, regulatory approvals and other customary closing conditions. Clariant and Huntsman are confident that the required regulatory approvals can be obtained in a timely manner.
This presentation contains financial measures that are not in accordance with generally accepted accounting principles in the U.S. (“GAAP”). For reconciliation of Huntsman’s non-GAAP measures please refer to the related presentation posted on our website, www.huntsman.com.