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Clariant Issues Financial Outlook; Ernesto Occhiello Appointed New CEO

Clariant (CRN.L) announced an updated strategy and financial outlook as well as the signing of a Memorandum of Understanding with SABIC on collaboration between the two companies in the area of high performance materials. By 2021, following the creation of High Performance Materials and the divestment of the remaining Plastics & Coatings Business Area, Clariant expects to deliver significantly higher sales of around 9 billion Swiss francs and an EBITDA margin of approximately 20% with an operating cash flow of more than 1.2 billion francs.

Hariolf Kottmann will resign from his position as Clariant CEO on 16 October 2018. SABIC's current Specialties Executive Vice President Ernesto Occhiello has been appointed as new CEO of Clariant, effective as of 16 October 2018. At the EGM scheduled for 16 October 2018, it will be proposed to expand the Clariant Board to 12 members of which four Board members to be nominated by SABIC. It will be proposed that Hariolf Kottmann will become the new Chairman of the Board, succeeding Rudolf Wehrli.

The combination of Clariant's and SABIC's offerings within Clariant is expected to result in significant synergies with an anticipated annual run-rate of 100 million Francs, realized over three years from closing. Implementation costs are estimated at 80 million francs over the same time. The combination will be significantly EPS accretive in the first year.

In the coming months, Clariant and SABIC will execute the carve-out of their respective businesses, conduct reciprocal due diligence and continue negotiating the transaction with the target to sign the definitive agreement by the end of the first half of 2019. Completion of the transaction is expected to take place towards the end of 2019, effective as of 1 January 2020.

Clariant also announced that by 2020 it intends to divest the Pigments, standard Masterbatches and Medical Specialties businesses which will not be included in the newly formed Business Area High Performance Materials.

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