The combined company expects to create value worth over $3.5 billion through lower operational costs and better procurement. It will save $400 million per year in costs within two years of the deal closing after a one-time cost of up to $500 million.
Huntsman is a world-scale polyurethanes, pigments, advanced materials, performance products and textile effects business. It is in the process of spinning off its pigments business and this is unaffected by the merger, Huntsman said.
Clariant, which was built up through the combination of a number of European chemicals firms, operates in: additives, catalysts, functional materials, industrial and consumer specialites, masterbatches, oil and mining services and pigments.
HuntsmanClariant will be chaired by Hariolf Kottmann, the current CEO of Clariant. Peter Huntsman, currently president and CEO of Huntsman will become CEO of the new company. Jon Huntsman becomes chairman emeritus and a board member. The Huntsman family, and a group of former shareholders of Sud Chemie, which control 13.9% of Clariant stock support the merger.
"I could not be more enthusiastic about this merger and look forward to working closely with Hariolf ... We will create a global leader in specialIty chemicals with a combined balance sheet providing substantial financial strength and flexibility," said Peter Huntsman.
Also commenting on the transaction, Kottmann said: "This is the perfect deal at the right time we are joining forces to gain much broader global reach, create more sustained innovation and achieve new growth opportunities." He continued: "Peter Huntsmen and I share the same strategic vision and I look forward to working with him."
The new company will be listed on the SIX Swiss Exchange and the New York Stock Exchange. The combined company will report in US dollars.