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Huntsman (HUN) to Divest its Remaining Stake in Venator

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Huntsman Corporation (HUN - Free Report) inked a definitive agreement to divest around 42.5 million of the shares that it holds in Venator Materials PLC for a cash consideration of nearly $100 million. The deal also includes a 30-month option to sell the balance holding of around 9.5 million shares at a price of $2.15 per share.

Huntsman expects the transaction to close near the end of 2020, subject to regulatory approvals. Notably, Huntsman expects to secure total cash benefits worth $250 million at the end of the year from the agreement. This will include estimated cash tax savings of around $150 million. Further, the proceeds will boost the company’s balance sheet and enhance its flexibility to invest in growth.

Huntsman's shares have gained 8.5% in the past year compared with the industry’s 6.1% rise.

In July, Huntsman stated that it expects global effects of the coronavirus pandemic to remain uncertain. The company is seeing improving trends within most of its key markets. Moreover, the integration for recent acquisitions, CVC Thermoset Specialties and Icynene-Lapolla, is ahead of plans and the company expects to achieve total annualized targeted synergies of $35 million for these acquisitions by the end of 2021. Including these synergies related to acquisitions, Huntsman plans to achieve more than $100 million of targeted annualized savings by the end of next year.

Zacks Rank & Key Picks

Huntsman currently carries a Zacks Rank #3 (Hold).

Some better-ranked stocks in the basic materials space include Kinross Gold Corporation (KGC - Free Report) , Eldorado Gold Corporation (EGO - Free Report) and Yamana Gold Inc. , each carrying a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 (Strong Buy) Rank stocks here.

Kinross has an expected earnings growth rate of 100% for 2020. The company’s shares have surged 78.7% in the past year.

Eldorado Gold has an expected earnings growth rate of 2,325% for 2020. Its shares have returned 24.5% in the past year.

Yamana has an expected earnings growth rate of 76.9% for 2020. The company’s shares have soared 71.6% in the past year.

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