Solutia Announces an Agreement to Sell its Resins, Additives and Adhesives Businesses
Solutia Inc. announced that it has signed a definitive agreement to sell its resins, additives and adhesives businesses to UCB S.A. for U.S. $500 million cash. In addition, UCB has made an upfront payment of $10 million for a short period of exclusivity. The sale is expected to close in early 2003, subject to completion of normal regulatory approvals and other customary closing conditions.
Georges Jacobs, chairman of the executive committee of UCB, said, "We are very pleased to welcome the resins, additives and adhesives businesses into our portfolio of specialty chemicals for coatings business. These businesses have played an important role in the development of environmentally friendly resins. Their products include a variety of water-borne resins, dozens of highly specialized Gelva(R) adhesive formulations and additives products which are used in a broad range of demanding applications in industries such as graphics and printing, automotive, medical and solar films. The businesses have been solid performers for Solutia, and we believe that they will be a remarkable fit within UCB, leading to a world class business for Surface Specialties."
Transaction Details
The transaction is anticipated to be slightly cash accretive and 7 to 9 cents dilutive to earnings per share in 2003. Upon closing, a modest accounting gain is expected. The company expects approximately $40 million in cash interest savings in 2003.
The agreement includes 10 production sites that make liquid and powder coatings, technical resins, additives products and pressure-sensitive adhesives. The resins, additives and adhesives businesses together employ approximately 1,700 individuals, in 22 countries and have sales of over $400 million for the nine months ended Sept. 30, 2002.
Facilities Involved
Solutia will sell manufacturing facilities in: Wiesbaden, Frankfurt-Fechenheim and Hamburg, Germany; Werndorf, Austria; Romano d'Ezzelino, Italy; Dijon, France; Soborg, Denmark; La Llagosta, Spain; Rayong, Thailand and Suzano, Brazil, as well as research and development facilities in Graz, Austria, and Springfield, Mass.
Solutia will continue to manufacture Resimene(R) amino cross-linking resins for UCB at the LaSalle, Canada, facility, and Indian Orchard plant in Springfield, Mass., and Gelva(R) adhesives in Massachusetts. All other manufacturing assets at the Indian Orchard facility will remain part of Solutia. The sale does not include Solutia's industrial products businesses or its Butvar(R) specials and dispersions and Santotac(R) product lines.
Employee Information
As part of today's agreement, current employees of the resins, additives and adhesives businesses will transfer to UCB. At the La Salle, Canada, and Springfield, Mass., locations, manufacturing employees will remain Solutia employees and manufacture Resimene(R) resins and Gelva(R) adhesives for UCB under operating agreements. In a limited number of areas, Solutia and UCB have agreed to provide transition service agreements where appropriate.
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