Huntsman terminates merger agreement with Basell

16-Jul-07

Huntsman Corporation has terminated the merger agreement with Basell AF, dated June 26, 2007, as the Hexion offer was deemed to be a superior proposal to the Basell Agreement and was unanimously approved by the Board of Directors of Huntsman. Huntsman has agreed to a definitive merger agreement with Hexion Specialty Chemicals, Inc., an Apollo Management, L.P. portfolio company, to acquire Huntsman all of the outstanding common stock of Huntsman for US$28.00 per share in cash. The transaction will be of total value of approximately US$10.6 billion, including the assumption of debt. The agreement also provides that the cash price per share be paid by Hexion will increase at the rate of 8% pa (inclusive of any dividends paid) beginning 270 days from July 12, 2007. The transaction is subject to customary closing conditions, including regulatory approval in the U.S. and in Europe, as well as the approval of Huntsman shareholders. Entities controlled by MatlinPatterson and the Huntsman family and a Huntsman charitable trust, who collectively own approximately 57% of Huntsman's common stock, have agreed to vote in favor of the transaction. The transaction is not subject to a financing condition and commitments have been obtained by Hexion for all necessary debt financing from affiliates of Credit Suisse and Deutsche Bank AG. Hexion will have up to 12 months, subject to a 90 day extension by the Huntsman Board of Directors under certain circumstances, to close the transaction. Huntsman's Board of Directors authorized the delivery of a notice of termination of the Basell Agreement, along with the payment of the $200 million break-up fee required by the Basell Agreement. Hexion funded $100 million of the Basell break-up fee while Huntsman funded the remaining $100 million. Huntsman is a global manufacturer and marketer of differentiated chemicals and pigments. Its operating companies manufacture products for a variety of global industries, including chemicals, plastics, automotive, aviation, textiles, footwear, paints and coatings, construction, technology, agriculture, health care, detergents, personal care, furniture, appliances and packaging.