Clariant, Huntsman abandon merger deal

Faced with growing opposition led by activist investor White Tale Holdings, Swiss specialty chemicals maker Clariant and U.S. group Huntsman Corp. have abandoned their proposed “merger of equals” announced in May.

The decision was unanimously approved by the boards of directors of Clariant and Huntsman, based in The Woodlands, Texas.

White Tale fought the deal for months on the grounds it would destroy shareholder value.

“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,” Peter Huntsman, president and CEO of Huntsman, and Hariolf Kottmann, CEO of Clariant, said in a joint statement. “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.”

The proposed merger – which would have given Clariant 52 per cent of the combined entity – would have created a specialty chemicals and plastics company with annual sales of approximately US$13 billion.

“While White Tale’s position on the merger has been different from ours, we share a common interest in increasing Clariant’s value,” Kottmann said in a separate statement. “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.”

Clariant, based in Muttenz, Switzerland, also confirmed that White Tale Holdings has increased its stake in Clariant to more than 20 per cent.