The US’s Huntsman Corporation (NYSE:HUN) and Clariant (VTX:CLN), from Switzerland, have announced a $20 billion merger after years of tentative mutual approaches.
The proposed merger will create a chemical manufacturer with a market value of over than $14 billion. Shareholders from Clariant will own 52 percent of the joint group, with Huntsman shareholders owning the remainder.
“This is the perfect deal at the right time,” said Mr Kottmann. “Clariant and Huntsman are joining forces to gain much broader global reach, create more sustained innovation power and achieve new growth opportunities.”
“This is in the best interest of all of our stakeholders. Peter Huntsman and I share the same strategic vision and I look forward to working with him.” he added.
Peter R. Huntsman, President and CEO of Huntsman, said: “I could not be more enthusiastic about this merger and look forward to working closely with Hariolf Kottmann, a man I have admired and trusted for the past decade.”
“We also look forward to a close association with his immensely talented colleagues around the world. Together, we will create a global leader in specialty chemicals with a combined balance sheet providing substantial financial strength and flexibility.” he continued in the joint statement.
Peter Huntsman will hold the same title at the combined group. Hariolf Kottmann, chief executive of Clariant will serve as chairman.
Both groups said that they hope to extract annual cost savings of about $400m within two years through the merger. This is equivalent to an estimated 3 percent of their total combined revenue last year.
Mr Huntsman said that the savings will come through reducing overheads in back-office functions, procurement, supply logistics and warehousing, rather than the closing of manufacturing plants.
“We don’t have any facilities that produce exactly the same products as the other one,” he said. “I don’t see a closure of [factory] capacities here. This is really not a deal that’s based on how we can close facilities and lay off people.”