Conflict on Huntsman Clariant merger

The opposition on the planned merger of US-based Huntsman Corporation and the Swiss company Clariant AG is getting stronger. Opposing Investors are now owning over 15 % of Clariant.

Investors from the US are oppoing the merger between Huntsman and Clariant. (Picture: Gajus/Fotolia) -

When Clariant and Huntsman announced that they are intending to form a new merged company called HuntsmanClariant, it looked like a well prepared deal and a smooth transition was to be expected. But in early July, an entity called White Tale announced its opposition on the deal and that it was owning 7.2 percent of Clariant’s shares. It later increased its shares to 10% and as of last week is owning 15.1% of Clariant.

Open letter against merger

White Tale Holdings is owned by the US based Hedge fund Corvex Management and 40 North, an investment company that is also based in the United States. In an open letter to Clariant, White Tale stated “the proposed transaction has no strategic merit” and also “the terms of the proposed merger significantly undervalue Clariant's shares while they simultaneously overvalue Huntsman.”

Clariant responded with a new press release and objected to White Tale’s claims. According to the Press release Clariant reconfirms its full commitment to the “planned merger of equals.” Also, Clariant stated that “White Tale’s open letter does not contain any additions to claims previously made; in particular no tangible alternative of superior value creation is presented.” Peter Huntsman, CEO of Huntsman Corporation, also addressed White Tales open letter and accused the company of “demonstrably false attacks on Huntsman’s performance and its portfolio.”

Not always smooth sailing

Even though the merger between Huntsman and Clariant is based on a mutual agreement, the deal was not necessarily always smooth sailing. According to Reuters, talks for a merger ended last year because Clariant was not willing to enter a deal where it would play the minor role. While those problems are obviously in the past now, they so strike a relatively similar cord as the accusations of White Tale.

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