Eastman to Acquire Solutia *Updated

January 27th, 2012 by Editor

by Sahely Mukerji, smukerji@glass.com

Officials at Eastman Chemical Co. of Kingsport, Tenn., and Solutia Inc. of St. Louis, have entered into a definitive agreement, under which Eastman will acquire Solutia. Under the terms of the agreement, Solutia stockholders will receive $22 in cash and 0.12 shares of Eastman common stock for each share of Solutia common stock.

“Solutia board of directors has agreed to a merger with Eastman Chemicals for an enterprise value of approximately $4.7 billion,” says Melissa H. Zona, director of corporate communications at Solutia. “Eastman’s offer represents a substantial premium for our shareholders. The agreement calls for the merger of the companies, which Solutia’s board of directors unanimously recommends be adopted by its shareholders.”

The merger creates a company with combined revenues of about $9.3 billion, Zona says. 

“The merger is financially compelling for Solutia’s shareholders, delivering immediate value and enabling investors to benefit over the long term from the combined company’s growth,” Zona adds. Solutia shareholders will receive cash and stock valued at $27.65 per Solutia common share, representing a premium of 42 percent and a total transaction value of approximately $4.7 billion, including the assumption of Solutia’s debt, she says.

“The acquisition of Solutia is a significant step in our growth strategy and one that I am confident will strengthen Eastman as a top-tier specialty chemical company with strong, stable margins,” says Jim Rogers, chairman and CEO of Eastman, in a company release. “The addition of Solutia will broaden our geographic reach into emerging geographies, particularly Asia Pacific, establish a powerful combined platform with extensive organic growth opportunities, and expand our portfolio of sustainable products, all of which are consistent with our growth strategy.

“This transaction is also expected to deliver immediate value to our stockholders in the form of accretion and strong cash generation, as well as create potential upside through the combination of two leading global chemical companies,” Rogers says in the release.

“This complementary transaction will accelerate the growth of our businesses around the world,” says Jeffry N. Quinn, chairman, president and CEO of Solutia, in the release. “This transaction provides Solutia’s shareholders with immediate value and an attractive premium, as well as the opportunity to benefit from the future prospects of a leading global chemicals producer with the financial strength, a diversified mix of premium products, and the geographic footprint to capitalize on long-term growth opportunities.”

In 1999 Solutia purchased CP Films.

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  1. Here we go again, The big monsters eat up the smaller monsters,and where does it leave the small window film operators.
    Unsure of what changes are about to take place, that can effect their businesses when these buy outs take place.
    The window dealers land up getting new rules on how they need to do busineess every time there is change.
    Why do companies in most cases sell out ?. They need more money like all of us, or they are jumping off the ship before it goes down.
    Who knows?,All I know, is after seeing window film businesses change hands over the past forty years, other companies suffer.
    This has happened to us as a window film distributor with the Llumar brand before, but as they say in the classics ”business is business”. Regards Leon Levy Klingshield South Africa

  2. Acquisitions occur all the time, especially in economic times we are working through right now. Solutia and Eastman is a good fit to develop and extend products they will no doubt work on together. Eastman bringing new technologies that will affect the film market and Solutia’s coating ability will help Eastman so this is likely to be a win win situation. Watch out for new energy technology in the Window Film sector from EastmanSolutia.

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