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Clariant and Huntsman Terminate Planned Merger Amid Activist Pressure

Clariant Chief Executive Hariolf Kottmann and Huntsman Chief Executive Peter Huntsman at a news conference in Zurich in May.

ZURICH—Swiss chemicals company Clariant AG CLZNY 0.62% and U.S.-based Huntsman Corp. HUN 0.51% said Friday they have terminated their proposed merger to create a $15 billion chemicals giant after facing pressure from U.S. activist investors who wanted to block the deal.

“Given the continued accumulation of Clariant shares by activist investor White Tale Holdings and its opposition to the transaction, which is now supported by some other shareholders, we believe that there is simply too much uncertainty as to whether Clariant will be able to secure the two-thirds shareholder approval that is required to approve the transaction under Swiss law,” the companies said in a statement.

They added that they still believe the deal would have been in the best interests of shareholders. Neither company will have to pay a breakup fee.

Clariant Chief Executive Hariolf Kottmann told reporters it was too soon for the company to discuss specific options now that the merger is off, though he said the company is well prepared to continue on its own. “Clariant had, and still has, several options to increase value” for its shareholders, he said.

Mr. Kottmann said he is staying with the company.

White Tale comprises investment funds 40 North Latitude Master Fund Ltd., controlled by U.S. investors David Winter and David Millstone, and Corvex Master Fund Ltd., controlled by well-known activist investor Keith Meister. White Tale has accumulated more than 20% of Clariant shares, Clariant said on Friday.

Mr. Kottmann said that when White Tale’s “buddies and friends” are included, the total stakes of White Tale and its allies were more than 20%.

White Tale had blasted the proposed deal for month as it steadily increased its stake in Clariant, calling it “detrimental” to shareholders while urging Clariant to consider alternatives.

“While White Tale’s position on the merger has been different from ours, we share a common interest in increasing Clariant’s value,” said Mr. Kottmann.

“We are committed to achieving this through a continuation of our existing and successful long-term growth strategy. That said, we will continue our dialogue with all our stakeholders,” he said.


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