Huntsman Corporation NYSE: HUN and Clariant AG VTX: CLN to Merge

Huntsman Corporation NYSE: HUN and Clariant AG VTX: CLN will merge to form a company with more than a $14 billion market share. The long-term partners have reportedly had years of mutual approaches for a merger. The two companies will combine, with Clariant shareholders owning 52% of the combined company.

Huntsman Corporation NYSE: HUN

The two companies have been in merger talks heavily for the past five weeks, according to CNBC.

CEO of  Huntsman Corporation NYSE: HUN Peter Huntsman and Clariant Chief Executive Hariolf Kottman have been friends for eight years, with the two hashing out the details of the agreement on a professional level. Mr Huntsman will be CEO of the new company: HuntsmanClariant, with Kottmann taking the role of chairman.

Huntsman Corporation NYSE: HUN Prevents Hostile Take Over

The merger is a result of common ground negotiations and didn’t have to undergo a hostile takeover, which has plagued the industry in recent years with Bayer’s (BAYN) move to takeover Monsanto (MON) a prime example of a hostile takeover.

The company will maintain its operational center in Texas, while the combined company’s headquarter will remain in Switzerland.

Kottmann has played an integral role in Clariant over the past five years restructuring the business. He has expanded manager roles to allow for faster decision making. The company was under pressure from investors to offer a strong growth strategy.

The combined company will have greater bargaining power to pursue future deals.

The two companies do not expect difficulties passing through anti-trust approvals. They are not expected to have to sell off major assets in the process. The deal will  be finalised before the years’ end.

Clariant will aim to keep its dividend policy.

Huntsman Corporation NYSE: HUN will continue to pursue an IPO for the company’s pigments operation.

Huntsman Corporation NYSE: HUN stock is up 2.02% in early-morning trade on Monday, with Clariant stock rising over 6% following both companies announcing the merger. The deal is an all-share deal with Huntsman owning a 48% stake in the combined company.