Basell to buy Huntsman in chemicals industry shakeup
By Dave Hannon -- Purchasing, 6/27/2007 8:25:00 AM
Dutch chemicals and plastics firm Basell announced it plans to acquire U.S. chemicals conglomorate Huntsman Corp. for $5.6 billion in cash, excluding debt.
Huntsman had reportedly been looking for a buyer for more than a year. The Huntsman family has given its blessing to the Basell deal, which is expected to close in the fourth quarter.
Basell was founded as a joint venture between BASF and Royal Dutch Shell. It was later sold to Access Industries, the holding company of U.S. industrialist Len Blavatnik.
Market reaction to the deal was mixed. In a Dow Jones report, Jefferies & Co. analyst Laurence Alexander said the deal will allow Basell to expand into the specialty chemical business.
Basell had been in the running for GE Plastics. "When they lost out on that acquisition to Saudi Basic Industries Corp., that was an indication that they wanted to move into the specialty chemical arena," Alexander said.
But in a Reuters story, HSBC analyst Hassan Ahmed said, "When you go out and make this sort of an acquisition, obviously you need to justify it with certain synergy estimates, I struggle to see how Basell is going to justify this."
Alexander also said a contested bid for Huntsman is unlikely. Standard & Poor analyst Richard O’Reilly agreed with that assessment.
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