Swiss speciality chemicals firm Clariant and American chemicals and surfactants producer Huntsman have called off their proposed merger after encountering scepticism from a part of their shareholder base.
According to joint statement by Clariant and Huntsman CEOs on 27 October, the US$20bn merger – originally agreed on in May – was terminated due to a large number of Clariant shares that were purchased by activist investor White Tale Holdings, which alongside some other shareholders opposed the deal.
“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,” Clariant CEO Hariolf Kottman and Huntsman CEO Peter R Huntsman said.
Due the unclear status of the merger, the companies jointly decided to scrap the merger plans and continue operation as separate entities.
The termination agreement did not impose contract break fees on either party, which in Clariant’s case meant the company did not have to pay the US$210M deal breakage fee nor the US$60M extraordinary general meeting (EGM) non-approval fee.
The merger, which the boards of both companies had considered the best available option in the face of a challenging global chemicals market, had been scheduled to close by the end of 2017.
In the edible oils sector, Huntsman supplies the home and personal care industries with surfactants based on renewable oils, including products such as castor oil ethoxylates, fatty acid alkanolamides, fatty alcohol alkoxylates and various ethoxylates.
Clariant supplies the edible oil industry with its Tonsil brand bleaching earth.