Chemicals firm Huntsman Corp. receives last tranche of billion-dollar settlement

31 December 2008

Chemical maker Huntsman Corp. said yesterday  that it had received $425 million in payments from Hexion Specialty Chemicals Inc., the final installment of its $1 billion settlement for terminating an earlier buyout deal.

In July 2007 Hexion, an affiliate of private equity firm Apollo Management LP, agreed to buy Salt Lake City-based Huntsman for $6.5 billion but then tried to cancel the deal, citing Huntsman's deteriorating finances.

After a number of court challenges, Huntsman finally let privately held Columbus, Ohio-based Hexion walk away for a $1-billion settlement on 14 December. (See: Apollo raises bid for Huntsman to $6.5 billion)

On 19 December, Huntsman received a $325 million termination fee provided for in the Merger Agreement. On 23 December, Huntsman received $250 million from Apollo affiliates for 10-year convertible notes issued by Huntsman. (See: Hexion pays Huntsman $325 million termination fees)

"We have received the $1 billion in payments sooner than anticipated which puts our company in a very unique position," said Huntsman's president and CEO Peter R Huntsman. "As we look forward to the upcoming year, our balance sheet is much stronger and our business is in a greater position to prosper."

Huntsman is a global manufacturer and marketer of differentiated chemicals. 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, detergent, personal care, furniture, appliances and packaging.