Eastman to maintain ownership of plasticizer business and
operations
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.
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version on businesswire.com: https://www.businesswire.com/news/home/20230928769618/en/
Media: Tracy Kilgore Addington 423-224-0498 / tracy@eastman.com
Investors: Greg Riddle 212-835-1620 / griddle@eastman.com
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