As recently as September, Huntsman Corp.’s chief executive, Peter Huntsman, was expressing confidence that Clari-ant shareholders would approve the merger and the deal would get done. But earlier this month, with the hedge funds holding an unusually large stake in Clariant, the companies began to believe that the deal could fail and discussed sweetening the terms for Clariant investors.

At that point, however, the combination was becoming less beneficial to his shareholders, Peter Huntsman said, and he decided to walk away, rather than agree to a bad deal.

“Sometimes you’re going to strike out,” Huntsman said in an interview with the Chronicle. “I’d be less than an honest if I did not say this was a disappointment for both companies.”