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In addition, Credit Suisse and Deutsche Bank will each provide $550 million of senior debt financing to Huntsman International LLC, a subsidiary of Huntsman, to be repaid over seven years, the banks said in a statement today.
The agreement with Huntsman drops all charges against the banks and ends all litigation among Credit Suisse, Deutsche Bank and their affiliates and Huntsman, said the statement.
"While we believe strongly in the merits of our case, we felt it was in our best interests to resolve the litigation for $316 million each. We are pleased to have the litigation behind us," the banks said.
A Huntsman spokesman was not immediately available for comment. The company is based in Salt Lake City but operated from The Woodlands.
The settlement comes during the second week of a jury trial before state District Judge Fred Edwards in Conroe, in which Huntsman sought up to $4.6 billion in compensatory damages and billions more in punitive damages related to its failed merger with Hexion.
Hexion, a portfolio company of New York private equity firm Apollo Management, pulled its $28-per-share offer for Huntsman in June 2008 amid concerns over Huntsman's weakening financial results and mounting debts. The companies had struck the deal in July 2007 in a merger that was supposed to create a global powerhouse in the chemical sector.
In December, Huntsman reached a $1 billion settlement with Hexion and affiliates of Apollo Management that resolved Huntsman suits against those companies.
But Huntsman continued to pursue claims in Texas court against Credit Suisse and Deutsche Bank. It alleged the banks illegally interfered with a July 2007 merger deal with Dutch chemical maker Basell to get Huntsman to accept a rival bid by Hexion. It accused the banks of then quietly working to dismantle the transaction when market conditions began to sour, breaking what Huntsman viewed as a rock-solid pledge to fund the deal.
The settlement will give Huntsman an infusion of cash at a time when the chemical industry is struggling with a recession-related downturn in business.
Huntsman shares rose 28 cents to $6.29 in New York Stock Exchange trading this morning.
brett.clanton@chron.com
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