Economy

Clariant and Hunstman's planned merger under attack by shareholders

Clariant and Hunstman's planned merger under attack by shareholders”

In a filing with Swiss regulators, 40 North Latitude Master Fund Ltd., controlled by USA investors David Winter and David Millstone, and Corvex Master Fund Ltd, controlled by investor Keith Meister, disclosed that their stake in Clariant exceeded 5% of voting rights. The stake is held through a company called White Tale Holdings, now Clariant's largest single shareholder, they said.

- Clariant and Huntsman said on May 22 they had agreed to merge in a transaction that would give the Swiss company 52 percent of the enlarged group, and create annual cost savings of more than $400 million.

Corvex, the hedge fund run by activist investor Keith Meister, has thrown a wrench into the planned $20 billion merger of plastics and rubber products maker Huntsman (hun) with Swiss-based Clariant (clzny). But the activist investors in question have argued the deal represents a poor piece of business: "The proposed merger has no strategic rationale and is in fact a complete reversal of the company's longstanding strategy of becoming a pure-play specialty chemicals company". Activist investors, which traditionally focus on the USA, have been drawn by surging equity markets in Europe and a stronger economic backdrop.

- Two activist investors announced on July 4 they had taken a stake in Swiss chemicals maker Clariant to frustrate its merger with US peer Huntsman. "We are taking all of our shareholders' interests seriously and maintain our long-practiced open and engaging attitude with them". The move by the United States investors makes a counterbid scenario "more likely".

The Clariant-Huntsman deal extended a record run of consolidation in the global chemicals industry including Dow Chemical Co.'s merger with DuPont Co. and China National Chemical Corp.'s takeover of Syngenta AG of Switzerland. "Clariant will be exchanging nearly half its shares for what is primarily a commodity and intermediates business which will further dilute its multiple and create a larger conglomerate discount". The deal was met with a lukewarm response from shareholders as the Swiss company, which had always been cited as a takeover target itself, had attracted investors betting on a buyout.



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