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Market Update

Clariant, Huntsman in $13 B Merger, Elliott Pressures Akzo

Author: Sarla Buch
Last Update: 12:24 PM ET May 22 2017

4:00 PM Frankfurt – Elliott Management dragged Akzo Nobel to Dutch court. Aegon agreed to sell its two largest U.S. run-off businesses to rival Wilton Re. Clariant agreed to acquire the U.S.-based Huntsman for $6.4 billion. Metals Exploration tumbled.

In London trading, FTSE 100 index advanced 30.88 or 0.4% to 7,501.72 and in Frankfurt the DAX index fell 14.36 to 12,625.06.

In Paris, CAC 40 index edged up 3.15 to 5,327.38.

Akzo Nobel N.V gained 0.7% to €75.84 after the activist investor Elliott Management Corporation asked judges to order the Netherland-based paints and coatings maker to enter in takeover talks with the U.S. rival.

“There is a crisis of confidence,” said in the court of Amsterdam, a lawyer for Elliott Jan Willem de Groot. The lawyer added Elliott invested €1 billion or $1.1 billion in Akzo.

However, Akzo said rival’s offer undervalues the company and is not in the best interest of stakeholders. PPG offered $27 billion in cash and stock.

Aegon N.V jumped 5.6% to €4.67 Netherland-based insurer agreed to sell its two largest U.S. runoff businesses, the payout annuity business and the bank owned/corporate owned life insurance business to its rival Wilton Re.

Under the terms, Aegon''s Transamerica life subsidiaries will reinsure liabilities of $14 billion to affiliates of Wilton Re U.S. Holding Inc.

Aegon group solvency II ratio is estimated to improve by about 6% points in second-half of this year.

Clariant AG surged 8.1% to 22.56 Swiss francs after Switzerland-based specialty chemicals maker agreed to buy the U.S.-based organic and inorganic chemical maker Huntsman Corporation for about $6.4 billion in all-stock deal that would create a company with market value of more than $14 billion.

The trans-Atlantic company valued at about $20 billion including debt and combined annual revenues are likely to exceed $13.2 billion and operating profit of about $2.3 billion.

The transaction is expected to close before the end of this year.

Metals Exploration Plc tumbled 25.9% to 2.50 pence after the U.K.-based precious metal producer said pretax profit in the year ending in March swung to a loss of £20.5 million from profit of £0.2 million in a year ago period.

The metal producer seeks to raise the funds or restructure finance facilities before the end of June after a slow start at its Philippines-based Runruno Gold Project and it is taken longer than expected to commence.

Sources: Data collected by 123jump.com and Ticker.com from company press releases, filings and corporate websites. Market data: BATS Exchange. Inc