Merger of Huntsman and Clariant on Track
MUTTENZ, Switzerland – Clariant and Huntsman Corp. have presented the first update to shareholders on the planned merger of the two companies. The update states that preparations to create HuntsmanClariant, a specialty chemicals company, are showing continued progress and are proceeding as planned, with a closing targeted for December 2017 to January 2018.
Clariant and Huntsman have agreed on a joint strategic direction for near- and long-term value creation based on continued focus on higher growth and higher margin businesses, expansion of existing strong downstream presence, reaping benefits of complementary product portfolios, and breadth of reach to deliver an additional organic sales revenue growth of around 2% per annum.
The portfolio management principles and capital allocation plans of the new company are fully aligned. There is a clear joint understanding of the combined company’s future core segments, and the direct majority of investments will be directed to growth areas and growth regions. The current downstream presence will be expanded by targeting formulation- and application-based segment niches as well as high-end composites, bespoke polyurethane (PU) systems, and customer-oriented and co-developed products. The existing presence in the adaptive chemical methylene diphenyl diisocyanate (MDI) and in chemical building blocks such as ethylene oxide (EO) and propylene oxide (PO) is to be further advanced in downstream urethane systems as well as downstream applications such as surfactants. The portfolio will be simplified. Complexity will be reduced while utilizing significant strategic flexibility to consider value-creating add-on acquisitions and divestments. Plastics & Coatings and Textile Effects will be managed for cash and turnaround while all other businesses will be managed for growth and margins.
The project team is progressing very well in terms of joint synergy implementation and has high confidence in meeting the synergy target in excess of $400 million as well as the $25 million tax saving target. Key regulatory filings are submitted, including in the United States, EU and China. No regulatory roadblocks are expected to closing the deal. A preliminary CFIUS filing has also been submitted.
The joint senior management team is committed to making HuntsmanClariant a success from day one, combining Huntsman’s entrepreneurship and efficiency and Clariant’s innovation and business excellence. Both CEOs and executive teams are fully involved in post-merger integration planning.