Hexion bags Huntsman, Basell deal terminated

The Woodlands, Texas -- Huntsman Corp. has terminated its merger agreement of 26 June with Basell AF and is instead to merge with Hexion Specialty Chemicals Inc. Under the new deal, Hexion, which is owned by private equity firm Apollo Management, will acquire Huntsman for around $10.6 billion --$28.00 per share in cash -- including the assumption of debt.

The Huntsman board had previously recommended a $25.25 per share bid from Basell that valued the company at some $9.6 billion. The Hexion offer, it said, was a "superior proposal" to that from Basell, which will now receive a $200-million break-up fee, funded equally by Hexion and Huntsman.

“Hexion is an attractive candidate for a merger with Huntsman,” said Peter Huntsman, president and CEO of Huntsman. “We have complementary businesses and, together, will have an even stronger technology platform from which to serve our customers.”

Based in Columbus, Ohio, Hexion is a leading supplier of thermoset resins for the global wood and industrial markets. The company reported 2006 sales of $5.2 billion and has over 7,000 employees.

Huntsman is a $13bn-turnover, global manufacturer of differentiated chemicals, plastics, paints and pigments. Its portfolio has more synergy with the Hexion product line-up of coatings and thermosetting resins than with that of Basell, the world’s leading manufacturer of polypropylene.

The merger of Basell and Huntsman would have created one of the largest chemical companies in the world, with combined revenues of over $26 billion and around 21,000 employees.