Huntsman Corporation today announced the decision of the Delaware Court of Chancery to enter judgment in favour of Huntsman Corporation denying all declarations sought by Apollo Management, L P and Hexion Specialty Chemicals, Inc. in their suit requesting that the Chancery Court excuse Hexion from its obligation to consummate the pending transaction.

Apollo and Hexion had alleged that Huntsman was not entitled to a $325-million break up fee and had suffered a material adverse effect since signing the merger agreement and that a solvency certificate or opinion could not be provided for the combined Hexion / Huntsman entity at the closing.

Both allegations were rejected by the Chancery Court.

Hexion Specialty Chemicals Inc has filed a suit to cancel its $10.6 billion acquisition of Huntsman Corporation because, it said, a merger would make the combined company insolvent and no bank would finance the deal. (See: Hexion files suit to cancel its $10.6 billion Huntsman deal) 

Hexion had agreed to acquire Salt Lake City-based Huntsman for $28 a share. Hexion to acquire Huntsman for $ 10.6 billion 

The Chancery Court ordered Hexion to specifically perform its covenants under the merger agreement, including the obligation to use its reasonable best efforts to take all actions necessary and proper to consummate the Merger in the most expeditious manner practicable.

The court further ordered that if the closing has not occurred by 1 October, the merger agreement termination date shall be extended until the court determines that Hexion has fully complied with its order.

''We are gratified that Apollo's allegations and tactics have failed to persuade the Chancery Court," Peter R. Huntsman, president and CEO of Huntsman Corporation reacted to vice chancellor Stephen P Lamb's decision.

He said, "Huntsman is a strong and dynamic company – indeed a global leader in many of its markets – and Apollo's misguided attempt to use 2008's turbulent energy and financial markets to construct a solvency issue where none existed has now been exposed. We call on Hexion to complete the remaining actions required by the Merger Agreement in compliance with the Court's order and proceed to closing.''

In addition to denying the relief sought by Apollo and Hexion, the Chancery Court also found that Hexion had breached a number of obligations and covenants under the Merger Agreement, and that such breaches were knowing and intentional and directed by Apollo.

Jon M. Huntsman, founder and chairman of Huntsman Corporation, added, ''We have claimed all along that Apollo would resort to any means necessary to break a legal and binding contract. Apollo was dishonest and untruthful and lost the case.''

Huntsman continues to seek damages exceeding $3 billion in its Texas lawsuit against Apollo and its partners Leon Black and Joshua Harris.