Hexion gets $540 million contribution from Apollo for Huntsman acquisition

By Jennifer Chiou

New York, Oct. 9 - Hexion Specialty Chemicals, Inc. announced that affiliates of Apollo Management, LP have agreed to make a capital contribution of $540 million to help fund the pending merger with Huntsman Corp.

Hexion said that the financing assists in addressing the issues raised in the decision last week by the Delaware Chancery Court in the merger.

Apollo Management has also informed Hexion that it will waive its contractual right to a transaction fee in connection with the merger and suspend for three years its ongoing monitoring fees from Hexion.

On Oct. 2, the Federal Trade Commission granted its approval of the proposed merger after Hexion agreed to settle FTC charges that the merger would violate antitrust laws.

According to the FTC, Hexion's proposed $10.6 billion acquisition of Huntsman would substantially lessen competition in North America for various end-use markets for specialty epoxy resins and the market for methyl diisocanate.

Hexion previously said the FTC accepted a consent order that requires Hexion to divest part of its specialty epoxy resin production and development capabilities to Spolek Pro Chemickou a Hutni Výrobu, Akciová Společnost within 10 days of Hexion's acquisition of Huntsman.

Included in the divestiture are plants and assets in Stuttgart, Germany; Duisburg, Germany; parts of Norco, La.; Bedford Park, Ill.; and Houston, said the FTC.

The European Commission also approved the sale to Spolek, which was a condition of its merger approval, an earlier Hexion news release said.

The Delaware Court of Chancery recently ordered Hexion to complete the merger.

Hexion and Apollo Management had asked the court to determine that Hexion is not obligated to consummate the merger, it was previously reported.

At issue was the ability of Huntsman to provide a solvency certificate or opinion prior to the merger's close. Hexion believed that completing the merger would render the combined company insolvent.

On July 12, 2007, Hexion agreed to acquire Huntsman in an all-cash transaction that included the assumption of debt. Huntsman shareholders approved the deal in October 2007.

Based in Columbus, Ohio, Hexion makes thermoset resins. Huntsman is a Salt Lake City manufacturer of differentiated chemicals and pigments.

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