Huntsman terminates Basell merger, will sell to Hexion

By Marilyn Tennissen | Jul 12, 2007

The Huntsman Corporation announced July 12 that it has terminated the merger agreement with Basell AF and has agreed to a definitive merger agreement with Hexion Specialty Chemicals, Inc., an Apollo Management LP portfolio company.

The value of the transaction is more than $10.5 billion.

Huntsman has operations in Port Neches and Port Arthur, as well as Conroe, Dayton, Alvin, Freeport, Odessa and Longview.

In a press release Thursday, Peter R. Huntsman, president and CEO of Huntsman said, "This is a very favorable outcome for our shareholders and one that reflects a confidence in our company of which our associates can be very proud. Hexion is an attractive candidate for a merger with Huntsman. We have complementary businesses and, together, will have an even stronger technology platform from which to serve our customers."

Jon M. Huntsman, founder and chairman of Huntsman added, "I have invested much of my life in Huntsman Corporation and consider it the highest honor to be associated with such exceptional customers and associates. However, the time has come when it is in the best interests of our shareholders to sell the company. I am pleased with the outcome of our merger negotiations with Apollo, and have every confidence that the combined Hexion and Huntsman teams will be superb stewards of this business for the next era."

On June 26, Huntsman announced it would be acquired by Basell in a transaction valued at approximately $9.6 billion.

The press release stated that the "Hexion Transaction was deemed to be a superior proposal to the Basell Agreement and was unanimously approved by the Board of Directors of Huntsman."

Under the terms of the new agreement, Hexion will acquire all of the outstanding common stock of Huntsman for $28.00 per share in cash. The agreement also provides that the cash price per share to be paid by Hexion will increase at the rate of 8 percent per annum beginning 270 days from July 12, 2007.

Huntsman's Board of Directors authorized the delivery of a notice of termination of the Basell Agreement, along with the payment of the $200 million break-up fee required by the Basell Agreement. Hexion funded $100 million of the Basell break-up fee while Huntsman funded the remaining $100 million.

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