From Deseret News archives:
Huntsman agrees to $6.5 billion acquisition by Apollo; Basell is out
Apollo, through its Hexion Specialty Chemicals Inc. unit, had offered $28 a share in cash for Huntsman which had previously accepted a $25.25 a share offer from the Dutch manufacturer Basell AF.
Huntsman gave Basell until Wednesday to raise its bid but said Basell failed to do so.
"We had a deal and we were very comfortable with that. We stick with that deal," said Basell spokeswoman Patricia Vangheluwe.
Huntsman CEO and president Peter R. Huntsman said he couldn't ignore a bid that was hundreds of millions of dollars higher than a deal he hatched with another suitor.
Huntsman's board approved the Apollo deal and has recommended that shareholders vote in favor.
Huntsman said his company wired a "mind-boggling" $200 million breakup fee to Basell, which is controlled by U.S. industrialist Len Blavatnik's Access Industries Inc. Hexion agreed to reimburse half of the amount of the fee.
Blavatnik was "quite disappointed — $25.25 was a good price at the time, but with Apollo bidding at $28, that was something to consider," Huntsman said in Houston before boarding a plane Thursday for Salt Lake City, where his company is based. It operates from The Woodlands, Texas.
He conceded a Huntsman-Hexion combination will have a harder and longer time gaining antitrust approvals in the U.S. and Europe because the overlap between the two chemical businesses.
"There are areas of overlap in the business, but we're confident we'll get through the Federal Trade Commission," he said.
To compensate for delays, Hexion agreed to pay a 8 percent annual premium for Huntsman shares if the closing takes longer than nine months, he said.
Huntsman said he didn't know if Hexion would keep him or his team of executives on over the long run — an arrangement he had with Basell.
Peter F. Loscocco, a vice president for Hexion, said it had yet to figure out how the two companies' management teams would mesh or whether any consolidation would result in plant closings.
Apollo Founding Partner Joshua J. Harris said the combined company will have annual sales of more than $14 billion and more than 21,000 associates and 180 facilities around the world.
Hexion Chairman and CEO Craig O. Morrison noted the deal gives the company expanded reach in the Asia-Pacific region.
The acquisition is also subject to shareholder approval. Entities controlled by MatlinPatterson and the Huntsman family, which collectively own about 57 percent of Huntsman's common stock, support the deal.
"We have complementary businesses and, together, will have an even stronger technology platform from which to serve our customers," said Peter Huntsman.
Huntsman founder and Chairman Jon M. Huntsman added that a sale is in the best interests of the company's shareholders.
Huntsman shares dropped $1.15, or 4.2 percent, to $26.40 in morning trading. The stock has traded between $9.36 and $13.95 during the past 52 weeks.
