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Chemical Makers Huntsman, Clariant Say Merger on Track
Jul 28, 2017 (M&A Navigator via COMTEX) -- (C)2017 M2 COMMUNICATIONS

28 July 2017 - The planned merger of US-based chemical manufacturer Huntsman Corp. (NYSE: HUN) and Switzerland-based specialty chemical company Clariant (SIX: CLN), forming HunstmanClariant, is on track to close, the companies said. Both companies issued statements expressing "high confidence" in meeting synergy target in excess of USD 400m and USD 25m tax saving target. They expect additional organic sales revenues of around 2% p.a. at approx. 20% EBITDA margin. Preparations to create HuntsmanClariant, a global specialty chemicals company, are showing continued strong progress and are proceeding as planned with an unchanged closing targeted for December 2017 / January 2018, the companies said. Clariant and Huntsman have agreed on a joint strategic direction for near- and long-term value creation based on continued focus on higher growth and higher margin businesses, expansion of existing strong downstream presence, reaping benefits of complementary product portfolios and breadth of reach to deliver an additional organic sales revenue growth of around 2% p.a. at approx. The merger of equals, announced in May, will be conducted as an all-stock transaction in which Huntsman shareholders receive 1.2196 shares in HuntsmanClariant for each Huntsman share (each existing Clariant share will remain outstanding as a share in HuntsmanClariant). On a pro forma 2016 basis, the combination of both companies will create a global specialty chemical company with sales of approximately USD 13.2bn, an adjusted EBITDA of USD 2.3bn and a combined enterprise value of approximately USD 20bn. The combined company expects to realise more than USD 3.5bn of value creation from approximately USD 400m in annual cost synergies. The full synergy run-rate is expected to be achieved within two years of closing. These synergies will be realised by reducing operational costs and improving procurement. The targeted synergies represent roughly 3.0% of total combined 2016 revenue with one-time costs up to USD 500m. Global headquarters will be located in Pratteln, Switzerland, and operational headquarters will be in The Woodlands, Texas. Huntsman is a manufacturer and marketer of differentiated chemicals with 2016 revenues of approximately USD 10bn. The company has more than 100 manufacturing and R/D facilities in approximately 30 countries and employs approximately 15,000 associates within five distinct business divisions including the pigments and additives division, which it intends to IPO as Venator Materials Corp. Clariant employs a total workforce of 17,442. In the financial year 2016, Clariant recorded sales of approximately CHF 6.0bn. The company reports in four business areas: care chemicals, catalysis, natural resources, and plastics and coatings. Citi and UBS AG are serving as Clariant's financial advisors for the transaction, with Homburger and Cleary Gottlieb Steen and Hamilton serving as its legal advisors. BofA Merrill Lynch and Moelis and Co LLC are serving as Huntsman's financial advisors for the transaction, with Kirkland and Ellis, Bar and Karrer and Vinson and Elkins acting as its legal advisors. Country: Switzerland Sector: Chemicals Target: Clariant Buyer: Huntsman Corp Vendor: Deal size in USD: Type: Merger Financing: Stock Status: Agreed Buyer advisor: BofA Merrill Lynch , Moelis and Co , Kirkland and Ellis, Bar and Karrer , Vinson and Elkins Comment:

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