Eastman to Acquire Sterling Chemicals and Restart Idled Plasticizer Plant

Eastman Chemical Company (NYSE:EMN) today announced that it has entered into a definitive merger agreement to acquire Sterling Chemicals, Inc. (OTC BB:SCHI.OB), a single site North American petrochemical producer, for $100 million in cash, subject to modest deductions at closing as provided in the merger agreement.

The transaction, which includes Sterling's plasticizer and acetic acid manufacturing assets in Texas City, Texas, is expected to be accretive to Eastman's full-year 2012 earnings per share in excess of Eastman's cost of capital.

Eastman plans to modify and restart Sterling's currently idled plasticizer manufacturing facility to produce non-phthalate plasticizers, including Eastman 168 non-phthalate plasticizers. This additional capacity will enable the company's Performance Chemicals and Intermediates (PCI) segment to serve the growing market demand for non-phthalate alternatives. In the North American and European non-phthalate plasticizers markets, total sales volume is expected to increase at a compounded annual rate of approximately seven percent over the next five years.

"This acquisition supports our growth strategy for our plasticizer product line, and will enable us to keep pace with the growing demand for non-phthalate alternatives, like our Eastman 168," said Ron Lindsay, executive vice president, performance chemicals and intermediates, and fibers. "We look forward to working with Sterling employees as we bring this additional capacity online and continue to grow this business."

The acquisition also includes Sterling's acetic acid production facility and its supply to BP Amoco Chemical Company under a long-term production agreement.

The transaction, which has been approved by both boards of directors, is expected to be completed after receipt of required regulatory approvals, approval of Sterling's stockholders, and satisfaction of other customary closing conditions. It is expected to be funded with available cash. Oppenheimer & Co. Inc. is acting as exclusive financial advisor to Eastman on this transaction and Eastman's legal counsel is Jones Day.

Eastman's chemicals, fibers and plastics are used as key ingredients in products that people use every day. Approximately 10,000 Eastman employees around the world blend technical expertise and innovation to deliver practical solutions. The company is committed to finding sustainable business opportunities within the diverse markets and geographies it serves. A global company headquartered in Kingsport, Tenn., USA, Eastman had 2010 sales of $5.8 billion. For more information, visit www.eastman.com.

Citations

Please use one of the following formats to cite this article in your essay, paper or report:

  • APA

    Eastman. (2019, February 09). Eastman to Acquire Sterling Chemicals and Restart Idled Plasticizer Plant. AZoM. Retrieved on January 26, 2021 from https://www.azom.com/news.aspx?newsID=29639.

  • MLA

    Eastman. "Eastman to Acquire Sterling Chemicals and Restart Idled Plasticizer Plant". AZoM. 26 January 2021. <https://www.azom.com/news.aspx?newsID=29639>.

  • Chicago

    Eastman. "Eastman to Acquire Sterling Chemicals and Restart Idled Plasticizer Plant". AZoM. https://www.azom.com/news.aspx?newsID=29639. (accessed January 26, 2021).

  • Harvard

    Eastman. 2019. Eastman to Acquire Sterling Chemicals and Restart Idled Plasticizer Plant. AZoM, viewed 26 January 2021, https://www.azom.com/news.aspx?newsID=29639.

Tell Us What You Think

Do you have a review, update or anything you would like to add to this news story?

Leave your feedback
Submit