Clariant (CLZNY) shares dropped in the first hour of trading after it abandoned its merger with U.S. rival Huntsman Corp. (HUN - Get Report) amid activist pressure.

Clariant shares fell 4.93% in the first hour of trading in Switzerland, their worst fall since August 2015 to change hands at Sfr24.29.

The Swiss chemicals group and its U.S. rival said Friday that they had agreed to call off their planned $20 billion merger by mutual agreement. The company had been under pressure from activist investor White Tale Holdings that claimed the deal significantly undervalued the Swiss company.

In a joint statement Clariant CEO Hariolf Kottman and President and CEO of Huntsman Peter R. Huntsman said that there was too much uncertainty for both companies.

"While we remain convinced that the proposed merger of equals as agreed to on May 21, 2017, is in the long term best interests of all of our shareholders, given the continued accumulation of shares by activist investor White Tale Holdings and their opposition to the transaction, now supported by some other shareholders, we believe that there is simply too much uncertainty as to whether Clariant will be able to secure the two-thirds shareholder approval that is required to approve the transaction under Swiss law," the pair said in a statement.

In a separate regulatory filing Friday, the company said that activist investor White Tale Holdings had increased its stake in the company to above 20%. White Tale began its campaign against Clariant in July with a 7.2% stake in the company.

The increased stake by White Tale meant that Clariant was unlikely to meet the two-thirds of shareholder approval needed to approve the deal.

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