Eastman Chemical to acquire Solutia Inc for $3.38 bn
27 Jan 2012
US specialty chemical company Eastman Chemical Co today said that it will pay around $3.38 billion in cash and stock to acquire Solutia Inc., in order to expand its product offerings and presence in the Asia Pacific region and emerging markets.
Kingsport, Tennessee, Eastman, a Fortune 500 company, will pay $22 in cash and 0.12 shares of its stock for each share of Solutia. Based on 26 January closing prices, Solutia shareholders will receive cash and stock valued at $27.65 per Solutia share, a premium of 42 per cent to the company's latest closing price
Based in St. Louis, Missouri, Solutia is a manufacturer of performance materials and specialty chemicals including polyvinyl butyral (PVB), ethylene vinyl acetate (EVA), and thermoplastic polyurethane (TPU) interlayers for laminated glass, aftermarket window films, protective barrier and conductive films, and rubber processing chemicals, used in architectural, automotive, alternative energy, electronic devices, consumer and industrial applications.
Solutia is the world's leading manufacturer of PVB, EVA, and TPU interlayers, custom-coated window and performance films, and chemicals for the rubber industry.
The company operates globally in more than 50 worldwide locations and reported net income of $78 million on revenues of $2 billion in 2010, with over 75 per cent of its sales coming from outside the US.
Formed in 1997 as part of the divestiture of Monsanto Company chemical business, Solutia filed for bankruptcy in December 2003 due to high unsustainable debt and a downturn in the economy. The company emerged from bankruptcy in early 2008.
Eastman, based in Kingsport, Tennessee, said that the total transaction value is around $4.7 billion, including the assumption of Solutia's debt.
Eastman has identified annual cost synergies of approximately $100 million that are expected to be achieved by year-end 2013. Key areas of value creation include the reduction of corporate costs, raw material synergies, and improved manufacturing and supply chain processes.