Apollo Management will provide $540 million to Hexion to help is close its merger with Huntsman. The disputed buyout was ordered to be completed despite the bidding parties’ argument that the target had suffered a material adverse change.
Hexion Specialty Chemicals, Inc. announced that it is proceeding expeditiously to seek to close its merger with Huntsman Corporation and, to assist it in closing the merger, affiliates of Apollo Management, L.P. 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.
Since the decision was issued last Monday night, Hexion has taken a number of significant steps towards completion of the Huntsman merger. As announced last week, both the European Union and the U.S. Federal Trade Commission 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.
Apollo’s equity commitment and fee waivers are conditioned upon consummation of the merger.
Commenting on these actions, Craig Morrison, Chief Executive Officer of Hexion, said, “We are grateful for Apollo’s support as we continue to work towards closing the Huntsman transaction.”
About Hexion Specialty Chemicals
Based in Columbus, Ohio, Hexion Specialty Chemicals 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 Specialty Chemicals is controlled by an affiliate of Apollo Management, L.P. Additional information is available at www.hexion.com.