Huntsman Accepts Acquisition Offer From Henson Corporation

On Thursday, chemical company Huntsman Corp. (HUN) decided not to pursue a deal it struck last month with Russian billionaire Len Blavatnik. The company agreed to be acquired by Hexion Specialty Chemicals, a subsidiary of Apollo anagement, for about $10.6 billion.

Shares of Huntsman, which is listed on the New York Stock Exchange, fell 4.4 percent to $26.35 as of 11:19 a.m. Eastern Daylight Time.

Hexion was initially quoted at $27.25 per share. That was $2 higher than the offer for Basell under Blavatnik. But Huntsman did not react immediately to this.

Earlier this week, Hexion raised its offer to $28 per share in an effort to reach a deal with Huntsman as soon as possible. Although Basell did not make a higher bid in response to Hexion’s initial offer.

Huntsman gave Basell an opportunity to increase its offer, but Blavatnik and his company did not follow through. Huntsman, a chemical company that invented the clamshell foam container used to package hamburgers, decided to accept Hexion’s offer.

Under the $9.6 billion deal Basell agreed to with Huntsman, Basell will receive a $200 million breakup fee. Earlier this month Hexion had said it would be directly responsible for half of the breakup fee paid to Basell.

The combined company will be one of the world’s largest chemical manufacturers and an industry leader,” said Craig Morrison, Hexion’s chief executive officer, in a statement. We will better serve our customers through the growth of our specialty materials portfolio. The merger will significantly improve our performance in global markets.”

Apollo Management noted that the new combined company will have annual sales of more than $14 billion. It employs approximately 21,000 people and operates 180 facilities worldwide.

MatlinPatterson acquired Huntsman in 2001 when the Utah-based chemical company was on the verge of bankruptcy due to its inability to pay certain debts.

Huntsman broke off merger talks with several potential buyers last year, including Apollo when Huntsman claimed that none of the offers were sufficient.