Huntsman agrees to be acquired by Hexion, rejects Basell

Utah-based petrochemical firm Huntsman Corporation has terminated its merger agreement with Dutch company Basell AF in favour of Hexion Specialty Chemicals, Inc. Huntsman has agreed to a merger agreement where Hexion will acquire the company for approximately US$10.6 billion, including the assumption of debt.

Basell had previously signed an agreement to acquire all of Huntsman’s outstanding common stock for US$25.25 per share, a deal valued at US$9.6 billion. However, Huntsman was allowed to terminate the Basell deal if it received a “superior proposal.”

Hexion, an Apollo Management, L.P. portfolio company, later offered to purchase Huntsman’s outstanding common stock for US$28 per share.

“Hexion is an attractive candidate for a merger with Huntsman,” said Huntsman president and CEO Peter Huntsman. “We have complementary businesses and, together, will have an even stronger technology platform from which to serve our customers.”

Huntsman’s board of directors approved the Hexion transaction unanimously, but the deal is still subject to customary closing conditions.

Huntsman also noted that it had delivered a notice of termination of the Basell agreement, along with a US$200 million break-up fee. Hexion agreed to pay half that amount as part of its bid.