Eastman Chemical Co. has agreed to sell its polyethylene terephthalate (PET) business and related assets of its performance polymers unit to DAK Americas LLC for about US$600 million in cash. Since April, Eastman has sold off parts of it, and has been considering strategic alternatives, including a possible sale of the rest of the unit on which the company has been losing money over the past several years.
DAK Americas will acquire 3 plants in South Carolina, with a capacity to produce 1.275 million tpa of PET and PTA combined, as well as intellectual property of Eastman's proprietary "Integrex" technology. The sale does not include any of Eastman's PET assets in Kingsport, TN or Rochester NY, which are integrated with its other chemicals and fibers business. The transaction is expected to close in Q4-2010, subject to regulatory approvals. Eastman expects to book a "modest" gain from the sale, adding the deal is also unlikely to impact on product lines in the company's specialty plastics segment.