- Huntsman (HUN -1.8%) drifts steadily lower following its merger of equals with Switzerland-based Clariant (OTC:CLZNF, OTCPK:CLZNY), as investors may have been expecting an outright takeover of the company.
- Reuters' Olaf Storbeck notes the deal's timing, as HUN’s shares have been on an impressive run for months, sparked by a plan to list its Venator pigments and additives business separately, as well as by the wider U.S. stock market rally.
- WSJ Heard On The Street's Paul Davies favors the deal but questions the anticipated $400M cost savings; $250M is supposed to come from combined corporate functions and infrastructure but says the savings could be hard to find given the proposed structure - HuntsmanClariant will have two headquarters, one in Switzerland and one in Texas - and the companies make different chemicals in different factories and do not expect to cut staff or production facilities.
- Also, HUN’s debt will give the combined group net debt worth more than 2.6x its 2016 EBITDA, although the planned eventual $2B sale of the pigments and additives business would cut the ratio to less than 1.5x, better than either company today.
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