Clariant Chief Blunts Activist Interest by Fast Transformation

Clariant AG Chief Executive Officer Hariolf Kottmann said he moved quickly to blunt activist shareholders who began to circle the Swiss specialty chemicals maker in the last three to four years.

“We are faster than activist shareholders,” the German executive, who has a PhD in organic chemistry, said in an interview on the sidelines of the company’s capital markets day in Frankfurt. “We had some contacts. Before they come with their first proposal, we have already implemented.”

Activists encouraging asset sales at DuPont Co. and Dow Chemical Co. in the U.S. have highlighted the power of such moves in the chemical industry. Within Switzerland, new rules that give shareholders more say on executive pay and annual elections for all board members have also made companies there more open to activism.

In 2009 Muttenz-based Clariant, formed from a spin-off of Sandoz 14 years earlier, was “not in a good shape” and activists began to take an interest, Kottmann said. He began a wide ranging revamp that included job cuts to counter slumping demand before buying Sued-Chemie for $2.5 billion to add higher-margin catalysts. Over the last two years, he completed the overhaul by selling off less profitable units making chemicals to treat paper, textiles and leather.

Since Kottmann joined in October 2008, shares have risen about 73 percent, helping to deter further attempts by outsiders to take control.

“There may be a high probability that you see activist shareholders here and there in Europe, but I would say the environment in the U.S. is much more receptive for something like this,” Kottmann said. In Germany, stronger unions which also hold supervisory board seats present a stronger defense against activists, he said.

Before it's here, it's on the Bloomberg Terminal.