By Pooja Menon
June 16 (Reuters) - Olin said on Tuesday it will acquire Huntsman in an all-stock deal valued at about $2.43 billion, combining two U.S. chemical producers as the industry seeks scale and cost savings amid a challenging environment.
Under the terms of the agreement, Huntsman shareholders will receive 0.5476 Olin shares for each share they own, valuing the deal at about $2.43 billion, according to a Reuters calculation based on Huntsman's 175.35 million shares outstanding per LSEG data.
The implied offer price of $13.85 per share is about 12.8% below Huntsman's last closing price. Shares of Huntsman fell 13%, while Olin's dropped 2.4% in morning trading.
Global chemical producers have been reassessing their strategies amid stagnant demand, rising production costs in Europe and shifting regulatory requirements.
The closure of the Strait of Hormuz following heightened regional tensions since late February has further disrupted oil and petrochemical flows, tightening global chemical supply and pushing up prices for plastics and polymers.
The merger will create a chemicals company with more than $12 billion in annual revenue and generate more than $400 million in cost synergies, the companies said.
The tie-up brings together Olin's manufacturing and feedstock capabilities, including chlorine and caustic soda, with Huntsman's downstream products and formulation expertise, improving vertical integration and cutting feedstock costs.
On a conference call, executives said Olin's ammunition division, Winchester, will remain a core part of the portfolio and a platform for future growth, leveraging the combined company's supply chain efficiencies.
They also see opportunities, especially in epoxy, to be able to compete in some industries previously out of reach.
The combined company, to be called OlinHuntsman and headquartered in The Woodlands, Texas, will be led by Olin Chief Executive Ken Lane, while Huntsman CEO Peter Huntsman will serve as non-executive chairman.
The deal, expected to close in the first half of 2027, will leave Olin shareholders with roughly 54.5% of the combined company and Huntsman shareholders with 45.5%.
(Reporting by Pooja Menon in Bengaluru; Editing by Vijay Kishore)
