George S. May Business Blog

Huntsman Corp. gets settlement a week in to trial

After a week of litigation, Huntsman Corp. settled with the two European Banks for $1.7 billion in cash and financing.

Huntsman had been after $4.65 billion in damages, accusing Credit Suisse Group and Deutsche Bank of intentionally trying to spoil an acquisition by Hexion Specialty Chemicals. The banks had said they didn’t provide financing for the deal because they didn’t think a combined Hexion-Huntsman would be solvent, a requirement under the financing commitment letter.

In the end, Credit Suisse Group and Deutsche Bank will pay Huntsman $632 million in cash. The banks will also provide Huntsman with $1.1 billion in loans. This as actually quite significant as, currently, loans are pretty hard to come by.

Apollo’s Hexion had agreed in July 2007 to buy Huntsman in a deal 100% funded by $15.4 billion of newly issued debt. It collapsed about a year later after Apollo asked a Delaware court to rescind it, also arguing that a combined company would be insolvent.

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