U.S.-based Huntsman and Switzerland's Clariant are combining to create a chemical manufacturer with a market value of more than $14 billion after years of tentative mutual approaches. Laura Frykberg reports
Proof perhaps that business CAN be mixed with pleasure. After eight years of friendship, these two CEO's.. Have merged their companies U.S based Huntsman Corp and the Swiss-based Clariant AG. The two will be become one massive chemical manufacturer. With a market value of more than 14 billion dollars. A figure that may seem impressive.. But some say could be a sign of wider financial struggle. (SOUNDBITE) (English) BGC PARTNERS MARKET STRATEGIST, MIKE INGRAM, SAYING: "An awful lot of M&A, not just within the chemical sector, but globally is defensive in nature. If you look at statements in and around most of this activity it is generally framed in such a way that they can extract cost cuts from this combination of businesses. We are still in an environment where topline growth remains extremely elusive and pricing power is not there. " And none more so than in Europe. Its chemicals industry has slowed - losing its market share to rivals in Asia... Where demand is growing faster, likewise in North America, where energy is cheaper. Little surprise then that this merge will see the company headquartered in Switzerland But its operational centre will be in the oil rich U.S. state of Texas.