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Clariant, Huntsman abandon $20 bln merger as opposition intensifies

29 October 2017

Activist investors seeking to block Clariant's $20 billion merger deal with Huntsman Corp have increased their stake in the Swiss specialty chemical maker to above 20 percent, triggering a disclosure filing, a source close to the matter said.

"It both significantly destroys existing Clariant shareholder value and prevents Clariant from pursuing multiple alternative and immediate opportunities to unlock value for its shareholders", White Tale said last month. "I think White Tale want something more short term".

Clariant and Huntsman struck the deal in May that would have given Clariant 52 percent of the combined entity, saying the combination would produce around $400 million in annual cost synergies and create the world's second-biggest specialty chemicals maker behind Germany's Evonik.

According to The Financial Times, White Tale's "success in blocking the deal is a high water mark for US activist investors, which have increasingly turned their attention to European companies".

Clariant was created in 1995 when it was spun off from the chemical company Sandoz.

Alex Roepers, CEO of the $1.3 billion Atlantic Investment Management group, said he had sold the rest of his Clariant stake on Friday, locking in a 50 percent gain in under a year.

The official announcement came on Friday.

The collapse of the Huntsman-Clariant deal is the latest sign of the increasing power of activist investors. Both companies agreed to waive break-up fees.

According to Reuters, activists investors in Switzerland have become increasingly aggressive about having a say in major company decisions.

Clariant declined to comment, reiterating only that a large majority of shareholders still backed the deal.

Clariant, which had hired Goldman Sachs to try to rescue the merger, makes aircraft de-icer, retardant for wildfires, plastics colorings, chemicals to help oil drillers separate oil from water and ingredients for shampoos. "Clariant had, and still has, several options to increase value" for its shareholders, he said.

White Tale has meanwhile been strengthening its position in Clariant.

Clariant, Huntsman abandon $20 bln merger as opposition intensifies