Lukewarm reaction

22 May 2017 By Olaf Storbeck

The $14 bln Swiss-American chemicals merger stacks up strategically, is fairly priced and could create $2.6 bln in post-tax savings. Yet the market initially factored in only half of the upside. The unpredictability of antitrust vetting and U.S. politics may explain the gap.

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Swiss speciality chemicals group Clariant and its U.S. peer Huntsman on May 22 announced an all-share merger that would create the world’s second largest speciality chemicals group, with pro-forma revenue of around $13 billion.

Clariant shareholders will get a stake of 52 percent in the new company, HuntsmanClariant. The companies expect the transaction, which they hope to close by the end of the year, to generate annual cost synergies of $400 million plus $25 million of annual tax savings.

The group’s global headquarters will be based in Switzerland, while the operational headquarters will be in Texas. Clariant Chief Executive Hariolf Kottmann will become the new company’s chairman, while Huntsman’s Chief Executive Peter Huntsman will take on the CEO role.

Clariant’s share price was up 9.1 percent to 22.78 Swiss francs by 0935 BST.

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