The two companies struggled to agree on how much their respective businesses were worth, Clariant chairman Hariolf Kottmann said in a telephone interview on Thursday.
“You need to find a compromise, if you don’t it’s better to take a bit of time,” Clariant Chief Financial Officer Patrick Jany said on the same call. “We’ve been looking at it in detail and just came to this point given the current market and business development.”
Both executives declined to elaborate on the sudden departure Wednesday of CEO Ernesto Occhiello, which was officially attributed to “personal reasons.” The relationship was “solid” and “collegial,” said Kottmann, who has taken on the role in the interim.
Sabic’s purchase of a 25 percent stake in Clariant and the planned creation of the plastics venture was supposed to provide a period of calm for the Swiss firm following intense turmoil created by an activist investor and years of takeover speculation.
Now, the CEO’s resignation and a downturn in markets have dashed some of those hopes.
Sabic and Clariant’s planned plastics and additives tie up would have had about 3.05 billion francs ($3.1 billion) in sales and offer savings in raw materials as well as possible plant mergers. Sabic would have contributed operations making polymers used in car-engine equipment as well as 5G telecom infrastructure. Clariant would have brought color pigments and other additives for materials.
A sharp downturn in the car industry has hurt production and dented demand for plastics and chemicals, leading to a spate of profit warnings at companies including BASF.
Clariant will continue with a plan to sell its pigments business, as well as a unit selling additives for plastics, it said in a statement.
Clariant reported earnings before interest, taxes, depreciation and amortization of 355 million francs ($360 million), down 2 percent from a year earlier. It booked a 231 million-franc charge related to an ongoing probe by antitrust investigators in Europe.
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