Eastman Chemical Company will acquire Solutia Inc., which makes hydraulic fluids, for $4.7 billion, both companies announced Jan. 27.
The acquisition of Solutia is a significant step in our growth strategy and one that will broaden our reach into emerging geographies, particularly Asia Pacific, said Jim Rogers, chairman and chief executive officer of Eastman. The company said it expects to see a 10 percent annual growth rate in the Asia Pacific region over the next three years.
Eastman produces chemicals that are used to produce synthetic lubricants, or are used as additives for synthetic lubricants in applications including metalworking. The company also produces an array of chemicals, fibers and plastics. Solutia, headquartered in St. Louis, Mo., manufactures a full line of fire-resistant aviation hydraulic fluids, which are used in more than half of the worlds commercial aircraft. The company also produces a variety of performance materials and specialty chemicals.
Under the agreement, expected to close in mid-2012, Solutia stockholders will receive $22 in cash and 0.12 shares of Eastern common stock for each share of Solutia common stock. Based on last Thursdays closing prices, Solutia shareholders will receive cash and stock valued at $27.65 per share, representing a premium of 42 percent and a total transaction value of $4.7 billion, including the assumption of Solutias debt.
This complementary transaction will accelerate the growth of our businesses around the world, said Jeffry N. Quinn, chairman, president and chief executive officer of Solutia.