The Woodlands, Texas - Huntsman Corp. is to be become part of the polymers and chemicals group owned by Apollo Management LP, having accepted a bid made through Apollo-owned Hexion Specialty Chemicals. Huntsman, a major supplier to the polyurethanes sector, announced 12 July that it had terminated its 26 June merger agreement with Basell AF and agreed to the Hexion offer, which values Huntsman at about $10 600 million, including debt.Huntsman said in its announcement that it judged Hexion's offer to be better: the new deal was unanimously approved by the Huntsman board. The transaction is subject to standard conditions, including regulatory approval and acceptance by Huntsman shareholders. Hexion will buy all outstanding Huntsman common stock for $28.00 a share in cash.MatlinPatterson, the Huntsman family and a Huntsman trust, who between them own about 57 percent of Huntsman's stock, are in favour of the transaction."This is a very favourable outcome for our shareholders and one that reflects a confidence in our company," said Peter Huntsman (pitured), president and ceo of Huntsman, in the Huntsman statement. "Hexion is an attractive candidate for a merger with Huntsman. We have complementary businesses and, together, will have an even stronger technology platform from which to serve our customers." Hexion said it has the necessary debt financing from affiliates of Credit Suisse and Deutsche Bank AG. Hexion will have up to 12 months to close the transaction. Huntsman's board has authorised termination of the Basell deal, which requires payment of a $200-million break-up fee, half of which is to be paid by Hexion. Hexion claims to be the world's largest producer of resins for industrial uses in binders, adhesive, coatings and inks. The firm, formed in mid-2005 from the merger of Borden Chemical Inc. and other resins groups, employs over 7000 globally, generating 2005 sales of $4500 million. Polyurethanes are an important business for Huntsman, making up $3457 million, or 33 percent of Huntsman's 2006 turnover of $10 623 million from continuing operations, and 46 percent of its earnings (EBIDTA) at $582.5 million out of $1237 million.But it is in epoxy resins that there is crossover between Hexion and Huntsman. Additionally, Apollo Management also owns Momentive Performance Materials, whose additives business includes silicone surfactants and other materials for the polyurethanes sector. Pointing out that it is in the interests of shareholders to sell the company, Jon M. Huntsman, founder and chairman of Huntsman, added: "I am pleased with the outcome of our merger negotiations with Apollo, and have every confidence that the combined Hexion and Huntsman teams will be superb stewards of this business for the next era." "