Eastman Chemical, a leading chemical company, has announced the sale of its Texas City operations to INEOS Acetyls, a global manufacturer and supplier of acetic acid and related chemicals. The deal is valued at $490 million.
Retaining Core Business
As part of the agreement, Eastman will retain ownership of its plasticizer business located at the Texas City site. INEOS will operate this business on behalf of Eastman. The two companies have also signed a memorandum of understanding to explore the possibility of a long-term agreement for supplying vinyl acetate monomer to Eastman.
Sale Details
The total sale price of $490 million will consist of $415 million in cash at closing. The remaining amount will be paid in equal installments on the first and second anniversaries of the closing. The final purchase price is subject to customary adjustments at closing, including working capital.
Utilizing Proceeds
Proceeds from the divestiture will be primarily used for debt repayment. With this strategic move, Eastman aims to strengthen its financial position and focus on its core business operations.
Positive Impact on Earnings
Eastman expects the sale to be accretive to adjusted earnings per share by 2024. This demonstrates the company’s commitment to creating long-term value for its shareholders.
Completion Timeline
The sale is expected to be completed in the fourth quarter of 2023. However, beginning in the third quarter of 2023 and until the sale is finalized, the assets of the Texas City acetyl operations will be reported as held for sale.