Peter Huntsman, currently president and CEO of Huntsman, will become CEO of the new company. Jon Huntsman becomes chairman emeritus and a board member. The Huntsman family, and a group of former shareholders of Sud Chemie, which control 13.9 percent of Clariant stock, support the merger.
Peter Huntsman of Huntsman said: “I could not be more enthusiastic about this merger and look forward to working closely with Hariolf. We look forward to a close association with his talented colleagues around the world. We will create a global leader in specialty chemicals with a combined balance sheet providing substantial financial strength and flexibility.”
Kottmann said: “This is the perfect deal at the right time we are joining forces to gain much broader global reach, create more sustained innovation and achieve new growth opportunities.” He continued: “Peter huntsmen and I share the same strategic vision and I look forward to working with him.”
The new company will be listed on the SIX Swiss Exchange and the New York Stock Exchange. The combined company will report in U.S. dollars I will start filing quarterly and annual results to U.S. Securities and Exchange Commission standards.
The Wall Street Journal reported May 21 that the two companies were near an agreement on an all-stock deal that may be announced May 22. The story quoted unnamed sources familiar with the merger talks.
The Woodlands, Texas-based Huntsman and Muttenz, Switzerland-based Clariant have been the subject of merger rumors and speculation for at least a decade. The companies reportedly had serious talks last fall that fell apart over which company would be the lead acquirer.
Analysts have speculated that Clariant needed to add bulk to compete in the specialty chemicals market, and there's been speculation in the past year that it would either be an acquirer or an acquisition target.
Merging with Huntsman, which is larger but less profitable, could be the deal that analysts have been seeking.
Huntsman reported 2016 sales of about $9.7 billion and profit of $357 million. Profitability has improved in recent years as the company exited some businesses and closed some production sites. Its main businesses today are polyurethanes and advanced materials, which includes products based on epoxy, acrylics and PU. Huntsman also is in the process of spinning off its titanium dioxide business into a separate firm named Venator. Huntsman will retain a 40 percent stake in the new company.
Likewise Clariant has seen its financial results improve as it has shifted to high-margin specialty chemicals.
Starting in January 2016, Clariant created a separate subsidiary for Plastics & Coatings. Plastics & Coatings is the group's largest segment and accounted for 43 percent of its 2016 sales. The Plastics & Coatings business includes masterbatch, additives and pigments.
Clariant reported 2016 sales of 5.847 billion Swiss francs ($6 billion), and EBITDA before exceptional items of 887 million Swiss francs ($911 million).
In February, when Clariant announced its 2016 results, Kottmann addressed rumors that the company was preparing to sell its plastics business.
He told analysts there was “currently no project for divesting plastics and coatings and making a multi-billion Swiss francs acquisition on the other end of the spectrum”.
“Everything currently, from a financial point of view, looks very nice,” he said, adding that the decision to create a separate plastics subsidiary “would give us certain kind of strategic flexibility.”
Clariant formed in 1995 as a spinoff from pharmaceuticals company Sandoz AG. Huntsman started off as a polystyrene packaging company in 1970, founded by Plastics Hall of Famer Jon Huntsman Sr., who is Peter Huntsman's father.