Eastman to Sell Texas City Operations to INEOS Acetyls for $490 Million
Eastman to maintain ownership of plasticizer business and operations
KINGSPORT, Tenn.–(BUSINESS WIRE)–
Eastman Chemical Company (NYSE:EMN) announced it has entered into a definitive agreement to sell its Texas City Operations, located in Texas City, Texas, to INEOS Acetyls, a global manufacturer and supplier of acetic acid and related chemicals owned by the INEOS Group. Texas City Operations is currently part of Eastman’s Chemical Intermediates segment. Eastman will retain ownership of its plasticizer business at the site, which INEOS will operate for Eastman as part of this agreement. Eastman and INEOS have also entered into a Memorandum of Understanding to explore options for a long-term agreement for supplying vinyl acetate monomer (“VAM”) to Eastman.
The total sale price of $490 million consists of approximately $415 million cash at closing and the remainder in equal installments on the first and second anniversaries of the closing. The final purchase price is subject to working capital and other customary adjustments at closing. Proceeds from the divestiture in the near term are expected to be used for debt repayment. The company expects the sale to be accretive to adjusted earnings per share in 2024.
“We are happy to have reached this agreement with INEOS. They have been a strong partner with us at the Texas City site and have extensive experience and a complementary position in the acetyls space,” said Erwin Dijkman, Division President, Chemical Intermediates. “Our Texas City Operations is an attractive site with an incredible team of people, and we are pleased that INEOS plans to further invest in and grow the site. We look forward to working closely with INEOS as we prepare for a seamless transition later this year, and longer-term as operators of our plasticizer assets at the site.”
David Brooks, Chief Executive Officer INEOS Acetyls, said, “We are delighted to announce this strategic acquisition, which helps drive our global ambitions for our acetyls business. The site is ideally placed to take advantage of competitively priced feedstocks, which will help support our future growth of our business and the sustainable future of the site.”
Eastman will continue to manufacture acetyls at its Tennessee Operations in Kingsport. Dijkman added, “As a global leader in acetyls, we remain committed to maintaining our position and to serving our current markets. We will also continue to pursue attractive opportunities created by our integrated cellulosics stream in Kingsport, such as our recent growth in textiles and expected growth of our Aventa™ Renew compostable materials in food service applications.”
The sale, subject to regulatory approvals and satisfaction of other customary closing conditions, is expected to be completed in the fourth quarter of 2023. The agreement contains customary representations, warranties, and covenants of both parties.
Beginning in the third quarter of 2023 and until sale, the assets of the Texas City acetyl operations will be reported as held for sale.
Non-GAAP Financial Measures
Earnings in this release exclude certain non-core and unusual items. “Adjusted net earnings attributable to Eastman” is net earnings attributable to Eastman adjusted for non-core and unusual items. “Adjusted earnings per share” is diluted earnings per share attributable to Eastman adjusted for non-core and unusual items. Reconciliations to the most directly comparable GAAP financial measures and other associated disclosures, including a description of the excluded and adjusted items, are available in the “Management’s Discussion and Analysis of Financial Condition and Results of Operations” sections of the Forms 10-K and 10-Q filed with the SEC for the periods for which non-GAAP financial measures are presented.
Eastman’s financial results forecasts do not include non-core, unusual, or non-recurring items. Accordingly, management is unable to reconcile projected full-year 2023 adjusted earnings per share to projected GAAP earnings per share without unreasonable efforts.
Forward-Looking Statements
This press release contains forward-looking statements within the meaning of the U.S. Private Securities Litigation Reform Act of 1995. Such statements are made in reliance upon the safe harbor provisions of Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934. In this context, forward-looking statements often address expected future business and financial performance and condition, and often contain words such as “expect,” “anticipate,” “believe,” “estimate,” “intend,” “plan,” “believe,” “seek,” “see,” “will,” “would,” “target,” and similar expressions and variations or negatives of these words. These forward-looking statements relate to, among other things, the proposed transaction between Eastman and INEOS Acetyls, the expected timetable for completing the proposed transaction, the use of proceeds from the divestiture, and the impacts and benefits of the proposed transaction. Such forward-looking statements are based upon certain preliminary information, internal estimates, and management assumptions, expectations, and plans. Forward-looking statements are subject to a number of risks and uncertainties, and actual performance or results could differ materially from that anticipated by any forward-looking statements. Although Eastman believes that these forward-looking statements are based on reasonable assumptions, it can give no assurance that any such forward-looking statements will materialize. Forward-looking statements speak only as of the date they are made, and the company undertakes no obligation to update or revise any forward-looking statement. Other important assumptions and factors that could cause actual results to differ materially from those in the forward-looking statements are detailed in the company’s filings with the Securities and Exchange Commission (the “SEC”), which are accessible on the SEC’s website at www.sec.gov and the company’s website at www.eastman.com.
About Eastman
Founded in 1920, Eastman is a global specialty materials company that produces a broad range of products found in items people use every day. With the purpose of enhancing the quality of life in a material way, Eastman works with customers to deliver innovative products and solutions while maintaining a commitment to safety and sustainability. The company’s innovation-driven growth model takes advantage of world-class technology platforms, deep customer engagement, and differentiated application development to grow its leading positions in attractive end markets such as transportation, building and construction, and consumables. As a globally inclusive and diverse company, Eastman employs approximately 14,500 people around the world and serves customers in more than 100 countries. The company had 2022 revenue of approximately $10.6 billion and is headquartered in Kingsport, Tennessee, USA. For more information, visit www.eastman.com.
About INEOS Acetyls
INEOS Acetyls is a global producer of acetic acid and a range of derivatives. It is the largest producer of acetic acid, acetic anhydride, and ethyl acetate in Europe. In the U.S., the INEOS Acetyls business has been a leading supplier of acetic acid and acetic anhydride to North and South America for more than 45 years. Across Asia, the business provides acetic acid and commercial services across the region. It is one of the largest acetic acid suppliers in Asia, with a strong reputation in the industry for following world-class standards of production.
About INEOS
INEOS is a global petrochemicals manufacturer, comprising 36 individual businesses. The company operates 194 facilities in 29 countries throughout the world, employing 26,000 people. INEOS makes the raw materials and energy used for everyday life. Its products make an indispensable contribution to society and are essential in applications ranging from the preservation of food to the provision of clean water; from construction of wind turbines, solar panels, and other renewable technologies to the construction of lighter and more fuel-efficient vehicles and aircraft; from medical devices and pharmaceuticals to clothing and apparel. In recent years, INEOS has diversified with the launch of INEOS Automotive and INEOS Hygienics, the acquisition of iconic British brand Belstaff, and an ever-expanding sports portfolio. As part of its greenhouse gas emission reduction strategy, INEOS businesses have put in place plans and actions needed to ensure that they lead the transition to a net zero economy by no later than 2050, whilst remaining profitable.
View source version on businesswire.com: https://www.businesswire.com/news/home/20230928769618/en/
Media: Tracy Kilgore Addington
423-224-0498 / [email protected]
Investors: Greg Riddle
212-835-1620 / [email protected]
KEYWORDS: Texas Tennessee United States North America
INDUSTRY KEYWORDS: Packaging Chemicals/Plastics Other Manufacturing Manufacturing
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