Activist investors White Tale and 40 North have sold their 25% stake in the Swiss chemical maker Clariant to SABIC, the Saudi Arabian chemical giant. The transaction, worth about $2.4 billion, makes SABIC Clariant’s largest shareholder.
The activists’ exit ends a hostile relationship with Clariant. The two investors helped scuttle Clariant’s planned merger with Huntsman last year. More recently, they pushed Clariant to hire an investment banker to conduct a strategic review. Clariant resisted the suggestion.
SABIC says it “currently has no plans to launch or otherwise effect a full takeover of Clariant.” Yet SABIC hasn’t been shy about making big deals to expand outside its home base. In 2002, it bought DSM’s petrochemical business for $1.8 billion, giving it a stake in the Western European basic chemicals business. In 2007, the Saudi firm spent $11.6 billion to buy GE Plastics, making it a force to be reckoned with in the engineering plastics market.
SABIC points out that Clariant’s product line “is complementary to SABIC’s existing specialties business and is well in line with SABIC’s strategy of opening up new growth opportunities in specialty chemicals.” The two companies already jointly own Scientific Design, a process technology and catalyst development firm.
For its part, Clariant says it intends to talk with SABIC and “explore possible ways to create value.” Clariant says it learned about SABIC’s share purchase just before the transaction.