Specialty plastics and chemicals maker Eastman Chemical Co. has acquired Solutia Inc. — a maker of specialty plastic films and chemicals — for almost $3.4 billion.
Kingsport, Tenn.-based Eastman will pay stockholders in St. Louis-based Solutia $22 per share, a 42 percent premium over Solutia's recent stock price. The deal is expected to create cost synergies of about $100 million by the end of 2013.
“The acquisition of Solutia is a significant step in our growth strategy,” Eastman Chairman and CEO Jim Rogers said in a Jan. 27 news release. “The addition … will broaden our geographic reach into emerging geographies, particularly Asia Pacific.”
Solutia's plastic products include window interlayers made from polyvinyl butyral, and performance films based on engineering resins. The firm also was involved in nylon resin before selling off that business in 2009.
Eastman produces Tritan-brand copolyester and other specialty resins. The firm was a major player in the PET resin market for decades before exiting that market in recent years.
In the news release, officials pointed out that Eastman and Solutia “share several key fundamentals,” including “a polymer science backbone.” They added that “the overlap of key end markets is expected to provide opportunities for growth.”
Solutia operates 23 manufacturing sites worldwide — including nine in the U.S., three in Germany, two each in Brazil, Belgium and the United Kingdom; and single plants in Japan, Malaysia, China, Mexico and France. The firm employs 3,300 worldwide, generating about one-third of its sales from Europe and one-fourth from the U.S.
Eastman employs about 10,000 worldwide, selling its products into end markets ranging from packaging to medical to cosmetics.
Both firms reported their full-year financial results for 2011 this week. Solutia posted sales of almost $2.1 billion — up 7.5 percent from 2010 — while its annual profit more than tripled to $267 million. At Eastman, sales for 2011 grew 23 percent to almost $7.2 billion, as profit soared almost 60 percent to $696 million.