Eastman Agrees To Sell Polyethylene Business To Westlake

Kingsport, TN - Eastman Chemical Company recently announced it has entered into a definitive agreement with Westlake Chemical Corporation for the sale of its polyethylene business. The sale will include Eastman's polyethylene and Epolene polymer businesses, related assets and the company's ethylene pipeline. The sale is for a purchase price of $255M in cash at closing. Closing is expected in the fourth quarter of 2006, subject to regulatory approval and customary conditions. The businesses and assets to be divested in this transaction generated approximately $680M in revenue during 2005.

Included in the sale are three polyethylene manufacturing plants, an Epolene facility—all located at Eastman's Texas Operations in Longview—and an ethylene pipeline between Mont Belvieu, TX, and the Texas Operations site. About 400 Eastman employees are associated with the polyethylene and Epolene businesses. Results from the polyethylene product lines are reported in the company's performance polymers segment, while results from the Epolene product lines are reported in the company's coatings, adhesives, specialty polymers and inks (CASPI) segment.

About 255 employees will remain with Eastman and continue producing polyethylene for Westlake. The two companies have an agreement that will allow continued operation of the Longview cracking facilities with a staged phase-out of older units beginning in 2007, allowing both companies to optimize the value of their respective olefin businesses under various market conditions.

SOURCE: Eastman Chemical Company