On a pro forma 2016 basis, the combination of both companies will create a leading global specialty chemical company with sales of approximately $13.2 billion, an adjusted EBITDA of $2.3 billion and a combined enterprise value of approximately $20 billion at announcement.
Hariolf Kottmann, current Clariant CEO, shall become chairman of the board of HuntsmanClariant. Peter Huntsman, current Huntsman president and CEO, will become CEO of HuntsmanClariant. Jon Huntsman, founder and chairman of Huntsman, shall become chairman emeritus and board member of HuntsmanClariant.
The firms contend the combined entity will benefit from each other’s strengths, and will have a significantly improved growth profile in highly attractive end markets and geographies.
Global headquarters for the merged company will be in Pratteln, Switzerland. Operational headquarters will run out of The Woodlands, TX.
“This is the perfect deal at the right time. Clariant and Huntsman are joining forces to gain much broader global reach, create more sustained innovation power and achieve new growth opportunities,” said Hariolf Kottmann, CEO of Clariant. “This is in the best interest of all of our stakeholders. Peter Huntsman and I share the same strategic vision and I look forward to working with him.”
“I could not be more enthusiastic about this merger and look forward to working closely with Hariolf Kottmann, a man I have admired and trusted for the past decade,”said Peter R. Huntsman, president and CEO of Huntsman. “We also look forward to a close association with his immensely talented colleagues around the world. Together, we will create a global leader in specialty chemicals with a combined balance sheet providing substantial financial strength and flexibility.”
The combined company expects to realize more than $3.5 billion of value creation from approximately $400 million in annual cost synergies. The full synergy run-rate will be achieved within two years of closing. These synergies will be realized by reducing operational costs and improving procurement. The targeted synergies represent roughly three percent of total combined 2016 revenue with one-time costs up to $500 million. There will also be additional cash-tax savings, said the firms.
Clariant shareholders represent 52%, Huntsman shareholders 48%. HunstmanClariant will have a dual stock exchange direct listing on the SIX Swiss Exchange and the New York Stock Exchange.
The transaction is targeted to close by year end 2017, subject to Clariant and Huntsman shareholder approvals, regulatory approvals and other customary closing conditions.