Huntsman seeks deals in China-Texglobe

Huntsman, the US chemicals group, is considering spending part of a $2.7bn compensation package from the collapse of a buy-out plan to acquire specialty chemical plants in China, according to a senior company executive.

The group, which moved the headquarters of its textile chemicals business from Basel to Singapore earlier this year, is evaluating several possible facilities, including some owned by Clariant and BASF, the Swiss and German chemicals groups.

??We are looking for potential acquisitions. The obvious place to look is China,?? said Paul Hulme, global president of Huntsman??s textile effects division, which makes advanced dyes and chemicals for clothes manufacturers.

Mr Hulme said Huntsman was ??very liquid?? after a failed private equity backed buy-out by Hexion last year, which collapsed when Deutsche Bank and Credit Suisse refused to finance the $6.5bn deal. The deal was signed in July 2007.

??We are in a very comfortable position,?? Mr Hulme said in an interview with the Financial Times.

??We are not going to pay top dollar, [but] there is a corporate war chest, and we are encouraged to come forward with sensible nominations or ideas.??

Mr Hulme said Huntsman was looking at a range of possible plants in China, including some owned by Chinese chemicals groups, which he did not identify, and plants owned by Clariant and BASF.

Both European groups are reviewing the future of their textile plants and have suggested they could be for sale.

Mr Hulme said the two European multinationals might be unwilling to sell in the short term at prices that Huntsman would be willing to pay.

Huntsman is the number one producer of textile dyes and chemicals.

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