Clariant and Huntsman merger dissolves under investor pressure

CLARIANT and Huntsman have cancelled their proposed US$20bn merger following pressure from activist investors.

THE CEOs of both companies issued a joint statement saying they remain convinced that the merger announced in May would have been in the long-term best interests of all shareholders, but the growing uncertainty caused by activist opposition has forced their hand.

"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 merger had been sold as an opportunity to create a leading global speciality chemicals company. Together the firms would have supplied a range of substances including industrial catalysts, cosmetics ingredients and agrichemicals.

White Tale argued that the merger would “significantly destroy existing Clariant shareholder value” and prevent the firm from pursuing immediate opportunities to unlock value for shareholders.

Clariant said the merger would have sped it towards its goal of reaching the top tier of the speciality chemicals industry. It added that it will continue to focus on growth, innovation and sustainability.

Huntsman CEO Peter Huntsman said the merger was an opportunity to accelerate the company’s downstream growth. Huntsman’s strategy for growth will now include making “bolt-on acquisitions”.