Eastman to Acquire Solutia

January 27, 2012

Eastman Chemical Co. and Solutia Inc. have entered into a definitive agreement under which Eastman will acquire Solutia. The transaction, expected to close in mid-2012, is valued at about $4.7 billion.

“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, Eastman chairman and CEO. “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 complementary transaction will accelerate the growth of our businesses around the world," adds Jeffry Quinn, Solutia chairman, president and CEO. "The shared commitment to innovation, quality and technical service will allow us to better serve our customers and creates opportunity for our employees around the globe. 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."

Eastman, based in Kingsport, Tenn., and Solutia, based in St. Louis, share several key fundamentals, such as complementary technologies and business capabilities, a polymer science backbone, similar operating philosophies and a high performance culture. In addition, the overlap of key end markets is expected to provide opportunities for growth, Eastman officials report. They also see potential for meaningful revenue synergies by leveraging both companies’ technology and business capabilities and end market overlaps, particularly in automotive and architectural.

Eastman produces a range of plasticizers, polymers and chemicals used in fenestration applications, including wood products and architectural glazings. Solutia's line includes Saflex interlayer material for laminated glass.  In 2011, it also announced plans to acquiare Southwall Technologies, the producer of Heat Mirror insulating film.

“I commend the excellent management team and employees of Solutia. Over the past several years, Solutia has transformed itself into a financially strong, innovative performance materials and specialty chemicals company, with enviable market leading positions in virtually every market it serves,” states Rogers. “That, in addition to both companies’ success integrating prior acquisitions, gives me confidence we will achieve a smooth transition. We look forward to welcoming Solutia employees to Eastman.”