“The best of both our businesses”: Huntsman of The Woodlands and Clariant join forces

THE WOODLANDS, Texas -- A new, global leader in specialty chemicals has recently formed.

After eight years of personal and professional friendship, Switzerland-based Clariant Chief Executive Hariolf Kottmann and The Woodlands-based Huntsman CEO Peter Huntsman recently agreed on a plan to combine their two businesses and form a chemical powerhouse in development and sustainability.

According to Hunstman’s website, the new company will be called HunstmanClariant and is initially valued around $20 billion.

In 1970, Hunstman formed as a fledgling packaging business but would soon evolve into one of the world’s largest modern chemical companies.

Clariant, based in Muttenz, Switzerland, formed in 1995 as a spin-off from Sandoz, which formed in 1886.

Now, the two companies have merged to expand their reach on a global scale.

Peter Huntsman is currently traveling in Europe and was unavailable to comment on the recent deal, but Sean Douglas, Huntsman's CFO, was able to give some insight.

“This has been in the making during many years of the relationship that the two existing CEOs have been able to forge,” Douglas said.

Douglas worked closely with Hunstman and the Board of Directors that unanimously approved the merger after weeks of intensive talks.

One major hurdle was deciding whose shareholders would hold the majority of the company.

Huntsman, Kottmann, Douglas and the Board of Directors agreed that Clariant’s shareholders would own 52 percent and Hunstman’s shareholders would own the remaining 48 percent of the newly formed company, according to Huntsman’s website.

“Both businesses have been very true to their objectives and goals over the last several years of moving more downstream in their businesses,” Douglas said. “Hence, we have a harmonious ability to bring these two great, strong companies together on a global scale that will be the greatest global specialty chemical company that we have today.”

HuntsmanClariant will be mainly incorporated in Switzerland, however, The Woodlands will serve as the operational epicenter.

“Although Peter Hunstman will be spending time in Switzerland, he will be spending a great deal of time (in The Woodlands) as well,” Douglas said. “The Woodlands will continue to be the platform for North America - and other very important functional aspects - of our business.”

The point this deal emphasizes is the acquisition of a more sustainable product and more opportunities for partners and shareholders from both parties.

“We’re going to take the best of both of our businesses and unlock value for shareholders with strong, joint innovation platforms and extensive expertise in product development and sustainability,” Douglas said. “I think we will have a very strong focus, as well, on an investment grade credit and a strong balance sheet that will allow an engine for future growth in this business.”

The transaction is targeted to be complete by the end of 2017.