Two of the world’s biggest chemical companies, Huntsman Corp., headquartered in Utah and Texas, and Clariant, based in Switzerland, won’t be merging after all.
Their CEOs blame an activist investor who has been scooping up huge amounts of Clariant stock with the intent of blocking the deal.
In Switzerland, such mergers must receive the support of two-thirds of shareholders.
White Tale Holdings, a company created by investor Keith Meister and the fund 40 North, now control 20 percent of the Clariant shares, more than any other entity.
White Tale believes the planned Huntsman-Clariant merger, announced in May, would have been bad for Clariant investors because the new company would assume Huntsman Corp.’s debts and its more financially volatile specialty chemical company.
In a joint announcement, Peter Huntsman, the CEO of Huntsman Corp., and Hariolf Kottmann, his counterpart at Clariant, said they remain convinced that the all-stock “merger of equals” is in “the long-term best interests of all of our shareholders.”
Their merger would have created HuntsmanClariant, a company with a $15 billion market value, with Clariant stockholders owning 52 percent and Huntsman’s stockholders 48 percent. The combined operation would have saved roughly $400 million in annual costs. The two companies had been courting each other for years.
The termination of the merger was announced late Thursday evening at the same time Huntsman Corp. released its positive third quarter earning statement. The company saw its profits more than double, to $179 million. It also announced that it had cut its debt from $4.5 billion to $2.4 billion, largely by relying on money from the public offering of Venator Materials, the spin-off of its pigments and additives division.
“While I am disappointed that the merger of equals agreement with Clariant has been terminated, Huntsman’s future has never been brighter,” said Peter Huntsman.
The company has its operational headquarters in The Woodlands, Texas, and its executive headquarters in Salt Lake City. Huntsman Corp. was founded by Jon Huntsman Sr., Peter’s father and a prominent Utah philanthropist. Huntsman Corp. operates more than 100 manufacturing and research facilities in roughly 30 countries and has a workforce of about 15,000 people.
Editor’s note • Paul Huntsman, a son of Huntsman Corp. founder Jon Huntsman Sr., is the owner and publisher of The Salt Lake Tribune.