Huntsman and Apollo/Hexion terminate merger
By David Hannon -- Purchasing, 1/15/2009 2:00:00 AM
A year and a half after it was announced, the proposed $6.5 billion merger of Apollo Global Management's Hexion Chemicals with Huntsman Corp. has been terminated.
The proposed deal dates back to July 2007, when Huntsman actually received offers from Dutch plastics firm Basell in addition to the Apollo/Hexion offer. But as the merger process dragged out amid a tighter lending market, the deal looked less likely. In October, Purchasing reported that the banks financing the deal—Credit Suisse and Deutsche Bank—had pulled their financing despite a court ordering Apollo/Hexion to complete the deal.
Huntsman has sued both of the banks alleging they conspired to nix the deal after the court's decision because of the downward trend in the markets. According to reports, Huntsman claims the banks "conspired with Apollo and tortuously interfered with Huntsman's prior merger agreement." According to Reuters, a jury trial on those claims is set to begin in May in Texas and Apollo has agreed cooperate with Huntsman in the case, the company said.
According to a statement on the deal, Huntsman will receive payments under the settlement agreement totaling $1 billion, including a $325 million break-up fee which Hexion expects will be funded by Credit Suisse and Deutsche Bank and cash payments to Huntsman by "certain affiliates of Apollo" totaling nearly $675 million.
Now Playing: 