Clariant & Huntsman merger to create $13 bn specialty chemicals behemoth

"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. 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,” said Hariolf Kottmann, CEO of Clariant.

Peter R Huntsman, president and CEO of Huntsman, added, "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."

Clariant shareholders will hold 52 percent in the combined entity, while Huntsman shareholders will own the remaining stake. The global headquarters of HuntsmanClariant will be located in Pratteln (Switzerland) and its operational headquarters will be based in The Woodlands, Texas.

The new company will accelerate value creation for shareholders through a more robust combination of technology, products and talent. The combined company expects to realise 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, will become chairman of the board of HuntsmanClariant, while Peter Huntsman, current Huntsman president and CEO, will become CEO of HuntsmanClariant. Jon Huntsman, founder and chairman of Huntsman, will become chairman emeritus and board member of HuntsmanClariant. 

The transaction is targeted to close by year end 2017, subject to Clariant and Huntsman shareholder approvals, regulatory approvals and other customary closing conditions. 

Huntsman Corporation is the manufacturer of differentiated chemicals with 2016 revenues of approximately $ 10 billion. The company has more than 100 manufacturing and R&D facilities in approximately 30 countries and employs approximately 15,000 associates within 5 distinct business divisions including the pigments and additives division which it intends to IPO as Venator Materials Corporation. 

Clariant, a globally leading specialty chemical company, recorded sales of approximately CHF 6 billion in 2016. The company reports in four business areas - care chemicals, catalysis, natural resources, and plastics & coatings.