Clariant and Huntsman Corporation jointly announced that they have mutually terminated their proposed merger of equals. The decision was unanimously approved by the boards of directors of Clariant and Huntsman.
In a joint statement, Peter R Huntsman, president and CEO, Huntsman, and Hariolf Kottmann, CEO, Clariant, stated: "We remain convinced that the proposed merger of equals, as agreed to on 21 May 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. We maintain a great respect for one another, and we want to recognise and express our mutual and deep appreciation for the efforts and incredible commitment demonstrated by the associates of each company over the past several months," added Huntsman and Kottmann.
The termination agreement foresees no payment of a break fee on either side. Clariant, therefore, avoids paying both the $210mn deal breakage fee and the $60mn EGM non-approval fee as foreseen in the merger agreement.
Following a thorough analysis of all strategic alternatives, Clariant's board of directors and executive committee unanimously considered the merger with Huntsman to be the best available option to further develop the company and increase the long-term value for all stakeholders. This view has been and is shared by the vast majority of its shareholders.
Rudolf Wehrli, chairman of the board of directors, Clariant, 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."
Kottmann commented further: "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."
While the merger would have enabled Clariant to speed up its strategy, the company has the utmost confidence in continuing 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. These elements will continue to be the foundation of Clariant's profitable growth, cash flow generation and value creation.