Eastman has agreed to sell its integrated PTA and PET resin business to DAK Americas, owned by Alpek, a division of Mexican conglomerate Alfa, for $600m million in cash. The transaction will probably be completed in the fourth quarter.
“This strategic operation will strengthen our presence in the North American PTA and PET markets, where we supply some of the most important companies in segments such as food, drink and personal care,” Armando Garza Sada, the Alfa board’s president, said in a statement on the Mexican Stock Exchange’s website.
Alfa, which reported 2009 sales of $8.5bn, is divided into four business groups: Alpek(petrochemicals), Nemak (aluminum auto parts), Sigma (frozen foods) and Alestra(telecommunications). Its headquarters is in Garza García, a municipality close to Monterrey, in northern Mexico.
“After reviewing strategic options for our Performance Polymers PET business, we determined this action to be the most beneficial to Eastman and our stockholders,” said Jim Rogers, Eastman president and CEO.
“With the path forward for PET now clear, we are dedicating all of our energies to leveraging our solid core businesses and strong balance sheet to deliver value creating growth.”
The sale is subject to regulatory approvals and satisfaction of other customary closing conditions and “is not expected to impact product lines in the company’s Specialty Plastics segment,” the Eastman statement added.
According to Alfa, the acquisition comprises three petrochemical plants with an annual capacity of 1.27 million metric tons, located in South Carolina, the first of which produces PTA while the other two produce PET.
The operation also includes the intellectual property rights to Eastman’s PTA and PET Integrex technology and access to the businesses’ “ample list of commercial relations”.
Alfa estimates that the three plants at the South Carolina complex produced $405 million in sales in the first half of 2010.