27 January 2012 17:38 [Source: ICIS news]
HOUSTON (ICIS)--US Eastman Chemical’s $4.7bn (€3.6bn) bid to acquire Solutia is in the best interest of Solutia’s shareholders and the company's other stakeholders, Jeffrey Quinn, CEO of Solutia, said on Friday.
The two US-based chemical companies announced Eastman’s friendly bid earlier on Friday.
Solutia’s share price was up 39.6% to $27.24at 11:33 local Houston time (17:33 GMT) on Friday morning.
“This transaction is in the best interest of our shareholders," and in the best interest of other Solutia stakeholders – employees, customers, suppliers and the communities around the world where the company has operations, Quinn said in a conference call.
“Solutia and Eastman are highly complementary to each other” in terms of businesses, geographic presence, products, as well as values and culture, Quinn said.
“This is indeed a transformative transaction,” he added.
The combined company would have the financial strength and a diversified mix of products to take advantage of “the powerful global trends” that are driving demand in the chemical industry, such as improving living standards across the world and increased urbanisation, Quinn said.
Meanwhile, Eastman CEO Jim Rogers said the company aims to retain its investment grade rating, despite new debt of about $3.5bn it will raise to help finance the deal.
Eastman's shares were up 5.5% at $49.71 at 11:33 local Houston time (17:33 GMT).
Eastman is a global chemical company with a broad portfolio of manufacturing technologies and chemical, plastic and fibre products. Solutia is a manufacturer of performance materials and specialty chemicals.
($1 = €0.76)
Additional reporting by Nigel Davis
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