HUNTSMAN
“Definitive agreement” on USD 10.6 bn takeover by Hexion / Basell declines to raise the stakes
US chemical group Huntsman (Salt Lake City, Utah / USA; www.huntsman.com) has agreed to be acquired by private equity investor Apollo (New York / USA; www.apolloic.com), which has offered USD 10.6 bn for the business on behalf of wholly owned Hexion Specialty Chemicals (Columbus, Ohio / USA; www.hexion.com). After raising the stakes against itself days earlier – see Plasteurope.com Web of 11.07.2007 – Apollo clinched the deal after rival Basell (Hoofddorp / The Netherlands; www.basell.com) declined to increase its original offer of USD 9.6 bn by 11 July, as the two companies had agreed when the Hexion bid became known.
In a statement, the global polyolefins market leader and former joint venture of BASF and Shell said the agreement signed with Huntsman on 26 June 2007 – see Plasteurope.com Web of 28.06.2007 – valued the chemical group “at a full and fair price, and offered certainty and the ability to close rapidly.” In its own statement, Huntsman management termed the Apollo/Hexion offer “superior.” For terminating the agreement, Huntsman and Hexion will split a USD 200m cash payment to Basell.
Apollo founding partner Joshua J. Harris said the merger with Huntsman “will build Hexion into one of the world’s largest specialty chemical companies.” with annual sales of USD 14 bn.
For its part, Basell is speculating that the transaction could run afoul of regulatory issues. The company said it will continue to “monitor the situation, as “the Hexion offer faces a lengthy and complex regulatory approval process” that will “require many months and is subject to uncertainty.” Apollo has offered to pay Huntsman a USD 325m fee if the deal fails to clear.
Not only Basell sees major regulatory issues in the agreed takeover. Analysts and consultants, while pointing to synergies in epoxies, point out that Huntsman and Hexion are tied for second place in the global market, behind Dow. They say the merged group could have a monopoly in Europe in some downstream products such as epoxy hardeners and composites and could be forced to sell off considerable assets.
In a statement, the global polyolefins market leader and former joint venture of BASF and Shell said the agreement signed with Huntsman on 26 June 2007 – see Plasteurope.com Web of 28.06.2007 – valued the chemical group “at a full and fair price, and offered certainty and the ability to close rapidly.” In its own statement, Huntsman management termed the Apollo/Hexion offer “superior.” For terminating the agreement, Huntsman and Hexion will split a USD 200m cash payment to Basell.
Apollo founding partner Joshua J. Harris said the merger with Huntsman “will build Hexion into one of the world’s largest specialty chemical companies.” with annual sales of USD 14 bn.
For its part, Basell is speculating that the transaction could run afoul of regulatory issues. The company said it will continue to “monitor the situation, as “the Hexion offer faces a lengthy and complex regulatory approval process” that will “require many months and is subject to uncertainty.” Apollo has offered to pay Huntsman a USD 325m fee if the deal fails to clear.
Not only Basell sees major regulatory issues in the agreed takeover. Analysts and consultants, while pointing to synergies in epoxies, point out that Huntsman and Hexion are tied for second place in the global market, behind Dow. They say the merged group could have a monopoly in Europe in some downstream products such as epoxy hardeners and composites and could be forced to sell off considerable assets.
13.07.2007 Plasteurope.com [208560]
Published on 13.07.2007
German version of this article...