Clariant and Huntsman abandon planned merger

“We remain convinced that the proposed merger of equals as agreed to on May 21, 2017, would have been in the long-term best interests of all of our shareholders. However, given the continued accumulation of Clariant shares by activist investor White Tale Holdings and its opposition to the transaction, which is now supported by some other shareholders, we believe that there is simply too much uncertainty as to whether Clariant will be able to secure the two-thirds shareholder approval that is required to approve the transaction under Swiss law. Under these circumstances and in light of the high level of disruption and uncertainty that has been created for both companies, we have jointly decided to terminate the merger agreement. This will allow both companies to focus again fully on their respective stand-alone strategies in the best interests of the companies and their shareholders, associates, and other stakeholders,” Peter R Huntsman, president and CEO of Huntsman, and Hariolf Kottmann, CEO of Clariant, said in a joint statement.

The Termination Agreement foresees no payment of a break fee on either side. Clariant, therefore, avoids paying both the $210 million deal breakage fee and the $60 million EGM non-approval fee as foreseen in the Merger Agreement.

Rudolf Wehrli, chairman of Clariant’s Board of Directors, said, “We regret the missed opportunity for value creation and thank our shareholders for their support. The Board of Directors, our CEO and our Executive Committee will now focus on our proven strategy to further strengthen the company’s market position as a globally leading specialty chemicals company.”

“While White Tale’s position on the merger has been different from ours, we share a common interest in increasing Clariant’s value. We are committed to achieving this through a continuation of our existing and successful long-term growth strategy. That said, we will continue our dialogue with all our stakeholders,” stated Clariant CEO Hariolf Kottmann.

Clariant will now continue its own path towards the goal of reaching a position in the top tier of the specialty chemicals industry. The success of its strategy is evidenced by a positive track record of increased profitability and enterprise value, a stronger portfolio which continues to grow, and leadership positions in innovation and sustainability. (RKS)

Fibre2Fashion News Desk – India