Business Context and Reporting Period
This Form 8-K, dated May 21, 2017, reports that Huntsman Corporation (Huntsman) and Clariant Ltd (Clariant) have entered into an Agreement and Plan of Merger. Under the agreement, a wholly-owned subsidiary of Clariant will merge with Huntsman, resulting in Huntsman becoming a wholly-owned subsidiary of Clariant. The combined entity will be renamed HuntsmanClariant Ltd.
Key Financial Metrics and Transaction Terms
This filing details the terms of a proposed merger rather than periodic financial performance. Key financial terms include:
- Merger Consideration: Each outstanding share of Huntsman Common Stock will be converted into the right to receive 1.2196 shares of Clariant Common Stock.
- Equity Awards: Outstanding equity awards under Huntsman's Stock Incentive Plans will be converted into similar Clariant equity awards.
- Termination Fees:
- Superior Proposal/Change of Recommendation: $210,000,000 payable by either party to the other.
- No-Vote Fee (Failure to Approve): $60,000,000 payable by the party whose shareholders fail to approve the transaction.
The filing does not provide specific revenue, profit, cash flow, margin, debt, or liquidity figures for the reporting period.
Material Changes and Governance
Upon completion of the merger, the governance structure of the Combined Company will be established as follows:
- Board of Directors: 12 directors total, with 6 appointed by Huntsman and 6 by Clariant.
- Leadership Roles:
- Chairman: Dr. Hariolf Kottmann (designated by Clariant).
- Chief Executive Officer: Peter R. Huntsman.
- Chief Financial Officer: Patrick Jany.
- Chairman Emeritus: Jon M. Huntsman, Sr.
- Headquarters: Registered offices in Muttenz, Switzerland; global headquarters in Pratteln, Switzerland; operational headquarters in The Woodlands, Texas.
Conditions, Risks, and Outlook
The consummation of the merger is subject to several material conditions, including:
- Approval by stockholders of both Huntsman and Clariant.
- SEC effectiveness of the Registration Statement on Form F-4.
- Receipt of Antitrust Clearances (Hart-Scott-Rodino and foreign approvals).
- Approval by the Committee on Foreign Investment in the United States (CFIUS).
- Listing approvals on the New York Stock Exchange and SIX Swiss Exchange.
Risks and Contingencies: The filing includes a cautionary statement regarding forward-looking statements. Risks include the possibility of regulatory denial, failure to obtain shareholder approval, disruption of business relationships, stockholder litigation, and the potential for a competing "superior proposal." The transaction may be terminated if closing does not occur by May 31, 2018.
Investor Verification Checklist
- Verify the exchange rate and market value of Clariant shares to assess the total value of the 1.2196 share conversion ratio.
- Monitor the status of regulatory approvals, specifically CFIUS and antitrust clearances, which are critical closing conditions.
- Review the upcoming Proxy Statement/Prospectus (Form F-4) for detailed financial data and voting instructions.
- Confirm the timeline for the special stockholder meetings required to approve the merger.
- Assess the potential impact of the $210 million termination fee on the company's balance sheet if the deal fails due to a superior proposal.