Huntsman Corporation 8-K Summary
Business Context and Reporting Period
This Current Report on Form 8-K was filed by Huntsman Corporation and its wholly-owned subsidiary, Huntsman International LLC, on August 7, 2019. The filing discloses the entry into a Material Definitive Agreement regarding the divestiture of specific business units.
Key Financial Metrics and Transaction Details
The filing details a transaction rather than periodic financial performance metrics such as revenue or cash flow. The key financial terms of the agreement are:
- Purchase Price: $2.0 billion in cash.
- Additional Liability Assumption: Up to approximately $76 million in net underfunded pension and other post-employment benefit liabilities.
- Adjustments: The purchase price is subject to closing and post-closing adjustments for deviations from net working capital and net indebtedness.
Material Changes and Transaction Scope
Huntsman agreed to sell the following assets to Indorama Ventures Holdings L.P. ("Indorama") and Indorama Ventures Public Company Limited:
- Equity of three Huntsman subsidiaries.
- Assets and liabilities comprising manufacturing facilities located in:
- Port Neches, Texas
- Dayton, Texas
- Chocolate Bayou, Texas
- Ankleshwar, India
- Botany, Australia
Outlook, Risks, and Conditions
The transaction is subject to the satisfaction or waiver of several closing conditions, including:
- Expiration or termination of the waiting period under the Hart-Scott-Rodino Antitrust Improvements Act of 1976.
- Receipt of approvals from the Brazilian Administrative Counsel of Economic Defense.
- Approval by the Committee on Foreign Investment in the United States (CFIUS).
- Approval by the Australian Foreign Investment Review Board.
- Absence of specified adverse laws or orders.
- Accuracy of representations and warranties and material compliance with covenants.
The filing includes standard forward-looking statement disclaimers, noting that actual results may differ due to risks described in Huntsman's Form 10-K for the fiscal year ended December 31, 2018.
Investor Verification Checklist
- Verify the status of regulatory approvals, specifically from CFIUS, the Australian Foreign Investment Review Board, and Brazilian authorities.
- Monitor the final purchase price adjustments related to net working capital and net indebtedness at closing.
- Review the full Equity and Asset Purchase Agreement (Exhibit 2.1) for specific representations, warranties, and covenants.
- Assess the impact of the divestiture on Huntsman's future revenue streams and operational footprint in the regions listed.