;
Home / Knowledge / News / Textiles / White Tale Holdings opposes Huntsman & Clariant merger
White Tale Holdings opposes Huntsman & Clariant merger
22
Sep '17
Courtesy: Huntsman
Courtesy: Huntsman
The board of Clariant, a world leader in specialty chemicals, has received a letter from White Tale Holdings, the Cayman Island-based vehicle created by hedge funds Corvex and 40 North, which says that White Tale has increased its stake in Clariant above 15 per cent. It also emphasises White Tale’s opposition to the merger between Huntsman and Clariant.

However, the board of directors of Clariant after carefully and diligently considering various strategic options during the last years remains deeply convinced that this combination in the form agreed in May 2017 is a perfect transaction at the right time to create substantial immediate and long-term shareholder value. It will accelerate the companies’ respective paths towards creating a global specialty chemicals leader.

The board said that the proposed merger was a continuation of Clariant’s strategy of becoming a world leader in specialty chemicals. The merger creates one of the largest global specialty chemicals groups, with an attractive, balanced and resilient portfolio across diverse industry segments and geographies, benefitting from a strong growth outlook and substantial exposure to attractive markets. Through proactive and consistent portfolio management, Huntsman’s portfolio has evolved and is evolving into a primarily specialty chemicals businesses and is, therefore, an excellent match for Clariant.

The terms of the proposed merger also do not undervalue Clariant's shares, it said.

The board clarified that the exchange ratio has been agreed on the basis of the respective share prices prevailing at the time of the announcement, reflecting the historic equity value proportion and is in line with a similarly strong track record of total shareholder return of both companies over the last years. In addition, the fairness, from a financial point of view, to Clariant, of the exchange ratio was confirmed with the assistance of Clariant's financial advisors.

The proposed merger offers substantial value creation to both sets of shareholders.
On top of the ambitious business plans of both companies over US$ 3.5 billion of value will be created through cost synergies in excess of US$ 400 million per annum. In addition to these cost synergies, tax synergies of US$ 25 million and approximately US$ 250 million additional organic revenues at approximately 20 per cent EBITDA margin will be realised thanks to the complementary product portfolios. More so, significant further future potential will result from strengthening common research and development platforms and projects. This substantial value creation is unmatched by any other viable alternative.

Whilst Clariant’s plastics and coatings business area has been earmarked for portfolio management since 2015, selling plastic and coatings as Clariant today would be value destructive in view of its significant cash contribution and cost coverage. Post consummation of the merger, the new company HuntsmanClariant will clearly have and use the greater flexibility of the enlarged Group to keep adjusting its portfolio to maximise value for its shareholders and build a leading specialty chemicals company.

Clariant has established a competitive cost structure in line with its peers despite significant research and development spend which forms the foundation for sustainable future growth. Any further cost cutting exercise will impair the company’s ability to compete in the future. US$ 300 million of stand-alone cost improvement as alleged by White Tale are neither sustainable nor in line with observed peer benchmarks.

In a merger of equals there is no ceding of operational control.

The new company will be jointly led by both management teams under Swiss Corporate Governance, domiciled and headquartered in Switzerland. Hariolf Kottmann will become chairman, Peter Huntsman will become CEO and Patrick Jany will become CFO of the new company. They will work together to deliver on their joint strategic vision for the merged company. (SV)

Fibre2Fashion News Desk – India


Must ReadView All

ILO, Sweden to promote decent work in Asian garment sector

Apparel/Garments | On 19th Dec 2018

ILO, Sweden to promote decent work in Asian garment sector

The Swedish International Development Cooperation Agency (SIDA)...

Courtesy: Ikea

Apparel/Garments | On 19th Dec 2018

Ikea to generate 10,000 jobs in Maharashtra over 3 yrs

Swedish furniture company Ikea is planning to hire 10,000, both...

ADB retains India's growth forecast at 7.3% for 2018-19

Textiles | On 19th Dec 2018

ADB retains India's growth forecast at 7.3% for 2018-19

The Asian Development Bank (ADB) has retained its India gross...

Interviews View All

Top executives, Textile industry

Top executives
Textile industry

Textile institutes need to change their curriculum

Rahul Bhadani, Looksgud

Rahul Bhadani
Looksgud

Navigating through catalogues is a bit hasslesome

Viral Desai, Zenitex Mill Pvt Ltd

Viral Desai
Zenitex Mill Pvt Ltd

Full of green energy

Mario Ploner,

Mario Ploner

<div>Italian company Tecnomeccanica Biellese specialises in planning and...

Abhishek Pachauri,

Abhishek Pachauri

Reckon Industries adapts latest systems for manufacturing from designing...

Hardik Sanghvi,

Hardik Sanghvi

Idealin Fogging Systems has been engaged in designing and manufacturing...

Steve Cole, Xerium Technologies

Steve Cole
Xerium Technologies

Steve Cole of Xerium Technologies discusses the industry. Xerium is the...

Luis Quijano, Liberty University

Luis Quijano
Liberty University

Focusing on bold patterns and colour palettes, Luis Quijano, a student at...

S Ziya Gumuser, Teknomelt

S Ziya Gumuser
Teknomelt

Turkish nonwoven manufacturer Teknomelt has been around for only seven...

Rupa Sood and Sharan Apparao, Nayaab

Rupa Sood and Sharan Apparao
Nayaab

Nayaab, an exhibition meant to celebrate Indian weaves, is in its second...

Mike Hoffman, Gildan Activewear SRL

Mike Hoffman
Gildan Activewear SRL

Gildan Activewear, a manufacturer and marketer of branded clothing and...

Sidharth Sinha, Sidharth Sinha

Sidharth Sinha
Sidharth Sinha

<b>Sidharth Sinha</b> has contributed to the successful rebirth and...

Press Release

Press Release

Letter to Editor

Letter to Editor

RSS Feed

RSS Feed

Submit your press release on


editorial@fibre2fashion.com

Letter To Editor






(Max. 8000 char.)

Search Companies





SEARCH

Leave your Comments


December 2018

Subscribe today and get the latest update on Textiles, Fashion, Apparel and so on.

news category


Related Categories:

Advanced Search