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Eastman Chemical Company acquires Solutia
Jul 06, 2012 (Datamonitor Financial Deals Tracker via COMTEX) -- (c) 2001-2007 Datamonitor. All rights reserved. Republication or redistribution, including by framing or similar means, is expressly prohibited without prior written consent. Datamonitor shall not be liable for errors or delays in the content, or for any actions taken in reliance thereon.

Eastman Chemical Company, a manufacturer of chemicals, plastics and fibers, has acquired Solutia, Inc., a manufacturer and marketer of chemical and engineered materials. Both the companies are based in the US.

Pursuant to the completion, Solutia will operate as a subsidiary of Eastman Chemical.

Update on June 29, 2012:

The shareholders of Solutia have approved the proposed acquisition of the company by Eastman Chemical.

The transaction is expected to close during July 2012.

Update on May 25, 2012:

Eastman Chemical has received an approval from the European Commission to acquire Solutia.

Announcement (January 27, 2012):

Eastman Chemical has entered into a definitive agreement to acquire Solutia. The transaction is valued at approximately $4,700 million, including the assumption of Solutia's debt.

Under the terms of the agreement, Solutia stockholders will receive $22 in cash and 0.12 shares of Eastman Chemical's common stock for each share of Solutia's common stock. Based on Eastman Chemical's closing price on January 26, 2012, Solutia shareholders will receive cash and stock valued at $27.65 per Solutia's common share.

The offer price represents a premium of 41.72% to the closing share price of Solutia's common stock on January 26, 2012.

The Boards of Directors of both the companies have approved the transaction.

Eastman Chemical will finance the cash portion of the acquisition price through a combination of cash on hand and debt. Citigroup, Inc. and Barclays Capital, Inc. are providing debt financing to the transaction.

Citigroup, Inc. and Barclays Capital, Inc. are acting as financial advisors, while Jones Day is acting as legal advisor to Eastman Chemical.

Deutsche Bank Securities, Inc., The Valence Group, LLC and Moelis & Company LLC are acting as financial advisors, and Kirkland & Ellis LLP is acting as legal advisor to Solutia, and Perella Weinberg Partners LP is acting as financial advisor to Solutia's Board of Directors.

The transaction is expected to close by June 2012.

Deal Participants

Deal Rationale

The acquisition strengthens Eastman Chemical as a top-tier specialty chemical company and will broaden its geographic reach into emerging geographies, particularly in Asia Pacific, and will expand its portfolio of sustainable products. This transaction will accelerate the growth of Eastman's businesses around the world and extend its global presence in emerging markets. The transaction will provide Solutia's shareholders with immediate value and a premium, as well as the opportunity to benefit from the future prospects of a global chemicals producer with the financial strength, a diversified mix of premium products, and the geographic footprint to capitalize on long-term growth opportunities.


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