UBS highlights vertical integration and cost synergies as primary drivers for the combined entity, projecting $8-$11 per share value.
Olin Corp. (OLN) and Huntsman Corp. (HUN) announced a merger focused on cost savings and vertical integration, according to a UBS research note. The deal aims to achieve $300 million in annual cost savings, with potential to reach $400 million, alongside $125 million in cash tax benefits.
The combined company expects to generate strong free cash flow but will face elevated leverage at 4.2 times EBITDA post-merger. Analysts emphasize debt reduction as a priority, though the synergies are projected to enhance profitability and competitiveness.
The merger surprised UBS, which noted the deal prioritizes operational efficiencies over expansion into new markets.