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Industry News
Hexion parent Apollo gives $540 million for Huntsman deal

Apollo Management LP, parent of Hexion Specialty Chemicals Inc., will contribute $540 million toward Hexion's efforts to acquire Huntsman Corp.

Author:
Posted on: 10/13/2008
Source: CompositesWorld
Hexion Specialty Chemicals Inc. (Columbus, Ohio) announced on Oct. 9 that it is proceeding to seek to close its merger with Huntsman Corp. (The Woodlands, Texas) and, to assist it in closing the merger, affiliates of Apollo Management LP (New York, N.Y.) have agreed to make a capital contribution of $540 million to Hexion. The new capital contribution, not required by any current contractual obligation of Hexion or Apollo, assists Hexion in addressing the issues raised in the decision last week by the Delaware Chancery Court in the pending merger. Apollo Management has also informed Hexion that it will waive its contractual right to a transaction fee in connection with the merger and suspend for three years its ongoing monitoring fees from Hexion.

The on-again, off-again merger is now on after the Delaware court ruled that Hexion had to move forward with its plans to acquire Huntsman. Hexion had tried to pull out of the deal citing concerns about Huntsman liquidity and viability. Since the decision was issued last Monday night, Hexion has taken a number of steps towards completion of the Huntsman merger. Both the European Union and the U.S. Federal Trade Commission (FTC) have completed their reviews of the transaction, and the parties have obtained the requisite approvals. In addition, Hexion is in ongoing discussions with Huntsman regarding a wide range of matters relating to the closing.

Commenting on the actions, Craig Morrison, CeO of Hexion, said, "We are grateful for Apollo's support as we continue to work towards closing the Huntsman transaction."

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