In one more sign of consolidation in the chemicals industry, American Huntsman is set to merge with Swiss company Clariant to create a chemicals giant worth about $20 billion. The CEO of Huntsman, Peter Huntsman, will be CEO of the combined company, while Clariant CEO Hariof Kottmann will be the Chairman.
Huntsman traces its roots to 1970 and was a family company for years before being listed on the NYSE in 2005. Last year, the company had sales of about $10 billion and profits of $350 million. Clariant was formerly a part of Swiss pharma giant Novartis before being spun-out as a separate company in 1995. Clariant’s 2016 sales were close to $6 billion, while profits were $270 million.
The merger is one in a wave of consolidation aimed at increasing efficiency in research and development investments and increase operational efficiency with better scale. Although it has been delayed several times to make moves to appease regulators, Dow Chemical and DuPont are set to merge in the largest transaction in the industry. PPG is also attempting to buy rival Akzo Nobel, and Praxair and German company Linde AG are also merging.
The combined company will also have better balance geographically, helping it to more easily withstand economic weakness in any one area of the global economy.
If the deal closes, Huntsman shareholders are set to own 48% of the combined company and Clariant shareholders 52%.
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