Two chemical specialty giants – Clariant and Huntsman Corp. – have reached a definitive agreement to merge, the companies announced Monday. The all-stock transaction, which was unanimously approved by their boards of directors, is set to be completed by the end of this year following regulatory approvals.
The combined company, HuntsmanClariant, would have a market value of roughly $20 billion, with combined sales of $13.2 billion and adjusted earnings of $2.3 billion, before interest, tax, depreciation and amortization.
Photo courtesy of Huntsman
Huntsman and Clariant combined have in the range of 100,000 metric tons per year of PAG capacity.
Huntsman shareholders will receive approximately 1.2 shares in HuntsmanClariant for each Huntsman share. Clariant shareholders will take 52 percent of the stock in the new company, with Huntsman shareholders owning the remaining 48 percent. The combined company will be listed on the New York Stock Exchange and the SIX Swiss Exchange.
Clariant reported sales revenue of 5.8 billion Swiss Francs (U.S. $6 billion) and Huntsman reported revenue of $9.7 billion for 2016. Together, the two companies believe they will achieve cost synergies in excess of $400 million within two years of closing.
Woodlands, Texas-headquartered Huntsman is a major supplier of raw materials and active ingredients used to enrich fuel and lubricant additives, and a global producer of additives used in the metalworking industry, such as amines and surfactants, according to its website. HuntsmanClariant expects to continue focusing on these industries, directing up to 15 percent of the companys focus to automotive, marine and aviation products and 15 to 20 percent to industrial products, including lubricants.
We will be a more important partner in this constantly changing and innovative field [of automotive end markets]. This is vital to both companies, as we dont want to be just suppliers of raw materials, but partners in developing new specifications and applications, said Huntsman Chief Executive Officer Peter Huntsman in a conference call.
The combined company will be the third-largest producer of polyalkylene glycol in the world, behind Dow Chemical and BASF. Muttenz, Switzerland-headquartered Clariant owns five PAG plants, plus two making esters and one making phosphate esters across five countries, and Huntsman operates two PAG plants in the Texas, according to LubesnGreases Nonconventional Base Stocks Guide. Neither company responded to requests for comment on their plans regarding these sites.
Hariolf Kottmann, Clariants CEO, will serve as HuntsmanClariants chairman. Peter Huntsman, will lead the new company as its CEO, and Clariants finance chief, Patrick Jany, will hold that role.
The companys global headquarters will be in Pratteln, Switzerland, and its operational headquarters will be in Woodlands, Texas.
This merger of equals – and we think its a true merger of equals that we are describing today – accelerates our joined path towards creating a leading global specialties chemicals company committed to profitable growth, said Kottmann on a conference call.