US: $20b merger collapses after hedge fund attack

Swiss chemicals giant Clariant and its US rival Hunstman have axed their US$20 billion merger after it came under attack from an activist investor group.

The two companies said Friday, October 27, that they decided call the deal off because of doubts that Clariant would be able to get the backing of enough shareholders to push the deal through.

The deal was undermined by White Tale Holdings, an activist investor who vocally opposed the merger and bought up Clariant shares in an effort to derail it.

White Tale, a partnership between hedge funds Corvex and 40 North, now claims to be the Swiss chemical giant’s biggest shareholder. “The proposed transaction has no strategic merit,” White Tale wrote in a letter published last month. “It both significantly destroys existing Clariant shareholder value and prevents Clariant from pursuing multiple alternative and immediate opportunities to unlock value for its shareholders.”

The successful revolt comes amid a wave of investor activism in Switzerland, where Credit Suisse and Nestle both face demands for change.

Clariant’s Chief Executive Hariolf Kottmann said the company still had options to explore after further talks with White Tale, which had so far not presented the company with an alternative plan.

Full Content: Financial Times

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