Hexion Specialty Chemicals, Inc. Announces Termination of Merger Agreement With Huntsman Corporation and Settlement
December 14 2008 - 9:56PM
Business Wire
Hexion Specialty Chemicals, Inc. (�Hexion�), today announced that
on December 13, 2008, Huntsman Corporation (NYSE: HUN) (�Huntsman�)
terminated the proposed merger between Huntsman and Hexion. On
December 14, 2008, Hexion entered into a settlement agreement with
Huntsman and other parties to end all litigation among Hexion,
Apollo Management, L.P. (�Apollo�) and its affiliates, the
controlling shareholder of Hexion, Apollo�s principals and
Huntsman. Hexion will pay Huntsman the $325 million merger
agreement termination fee. Hexion has financial commitments from
affiliates of Credit Suisse and Deutsche Bank (the �Banks�) to fund
the $325 million termination fee, which Hexion expects to promptly
draw to fund the payment. Hexion intends for the termination fee to
be borrowed by Hexion LLC, the parent company of Hexion, which will
not impact Hexion�s operating performance or its compliance with
its debt covenants. Hexion fully expects the Banks to honor their
commitments associated with the funding of the termination fee.
Separately, an affiliate of Apollo has agreed to make a $200
million investment in Hexion�s parent company, the proceeds of
which will be used by Hexion for general business purposes. In
summary, under the terms of the agreement with Huntsman, an
affiliate of Apollo and certain funds managed by Apollo, have
agreed to pay Huntsman $425 million to settle all claims. In
addition, certain funds managed by Apollo have agreed to purchase
$250 million principal amount of Huntsman senior convertible notes.
�We are pleased that this matter has been resolved,� said Craig O.
Morrison, Chairman and CEO of Hexion. �We appreciate Apollo�s
ongoing support of Hexion. Their incremental investment in Hexion
will help to solidify our leadership position in the marketplace.
Moreover, it will help us remain a strong competitor in a difficult
economic environment. We are well-positioned to compete globally as
a stand-alone company, and we look forward to focusing fully on
serving our customers and growing our business.� About Hexion
Specialty Chemicals, Inc. Based in Columbus, Ohio, Hexion Specialty
Chemicals is the global leader in thermoset resins. Hexion serves
the global wood and industrial markets through a broad range of
thermoset technologies, specialty products and technical support
for customers in a diverse range of applications and industries.
Hexion has more than 7,000 associates and over 100 manufacturing
sites around the world. The company had 2007 revenues of $5.8
billion. Additional information is available at www.hexion.com.
Forward Looking Statements Certain statements in this press release
are forward-looking statements within the meaning of Section 27A of
the Securities Act of 1933, as amended, and Section 21E of the
Securities Exchange Act of 1934, as amended. In addition, the
management of Hexion Specialty Chemicals, Inc. (which may be
referred to as �Hexion,� �we,� �us,� �our� or the �Company�) may
from time to time make oral forward-looking statements. Forward
looking statements may be identified by the words �believe,�
�expect,� �anticipate,� �project,� �plan,� �estimate,� �will� or
�intend� or similar expressions. Forward-looking statements reflect
our current views about future events and are based on currently
available financial, economic and competitive data and on our
current business plans. Actual results could vary materially
depending on risks and uncertainties that may affect our markets,
services, prices and other factors as discussed in our 2007 Annual
Report on Form 10-K, and our other filings, with the Securities and
Exchange Commission (SEC). Important factors that could cause
actual results to differ materially from those in the
forward-looking statements include, but are not limited to:
economic factors such as the current credit crisis and economic
downturn and an interruption in the supply of or increased pricing
of raw materials due to natural disasters; competitive factors such
as pricing actions by our competitors that could affect our
operating margins; and regulatory factors such as changes in
governmental regulations involving our products that lead to
environmental and legal matters as described in our 2007 Annual
Report on Form 10-K, and our other filings, with the SEC.
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