Huntsman Corp, the family-owned chemical company, has agreed to a settlement worth $1.73 billion to end its compensation claims against Credit Suisse and Deutsche Bank.
Huntsman was seeking $13 billion in damages from the banks for their part in the failed merger between Huntsman and rivals Hexion, first agreed in 2007. The settlement gives Huntsman $620 million in cash along with long-term financing and reimbursement of litigation costs.
Peter Huntsman (pictured), company CEO and son of the founder, said: "This settlement with the banks marks a very successful conclusion to this litigation for the company and all of its stakeholders. The cash and financing will enhance our already enviable cash position to more than $1.7 billion and provide us with much greater flexibility as we manage our business. We are well positioned to prosper as we move forward past this concern."
The settlement is the end of a protracted and bitter battle between Huntsman Corp and those involved with the failed takeover.
Huntsman has already successfully settled with Apollo Management, the company that controls Hexion Speciality Chemical Inc, for $1 billion over the failed acquisition.
Credit Suisse and Deutsche Bank agreed to fund Apollo Management's $6.5 billion purchase of Huntsman Corp in 2007. Soon after the agreement the credit market drastically declined and the world entered the current financial crisis.
In July 2008 Hexion attempted to stop the merger by claming that although the two companies were solvent as separate entities, as one company they would become insolvent. A Texan judge threw out this claim in September 2008, and Hexon and Apollo were ordered consummate the merger as quickly as possible.
October 2008 saw Credit Suisse and Deutsche Bank forbidden to claim the merged company would be insolvent as a defence for not financing the agreement. However, they still refused to provide immediate financing, resulting in Huntsman filing a lawsuit against them in November last year.
Huntsman founder Jon Huntsman (pictured) said: "We will put these proceeds to good use as we press forward with the next successful chapter of our company and history."