Status Report: Huntsman Corporation - Hexion Specialty Chemicals

| About: Huntsman Corporation (HUN)

The European Commission has conditionally approved the Huntsman Corporation (NYSE:HUN) - Hexion Specialty Chemicals transaction. Excerpts from the official EC press release included the following:

To remove the Commission's concerns, Hexion offered to divest all facilities belonging to its own epoxy resin business at Duisburg (Germany), its facility at Stuttgart (Germany), its facility at Argo (US), its High Performance Resin Unit at Norco (US), as well as RD assets in Duisburg, Stuttgart and Houston (US), including tangible and intangible assets, such as IPRs, licenses, permits, contracts, brands and personnel. After market testing the proposed remedies, the Commission concluded that they were suitable and viable to address the competition concerns identified in its market investigation and, on this basis, decided to authorise the transaction, as modified by the commitment.

In a separate and more critical development, hedge fund company D.E. Shaw has announced that it intends to help resolve the current dispute between the two entities by serving as a mediator and/or financing source to expedite the transaction. This development comes less than a day after HUN publicly repeated its claims that Hexion/Apollo remain obligated to extend the July 4 termination date and ultimately complete the transaction.

While these are certainly positive events that provide some hope that this deal can be salvaged, it remains perceived that Hexion/Apollo have very little interest in pursuing the transaction at this time. Barring a near-miraculous turnaround in this situation, this transaction is expected to be terminated in the near future.

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