Eastman to acquire Sterling Chemicals to boost plasticizer product line

23-Jun-11

Eastman Chemical Company will acquire all of the outstanding equity of Sterling Chemicals for US$100 million in cash, subject to certain adjustments as provided in the merger agreement. The merger, which has been approved by the Sterling Chemical’s board of directors upon the recommendation of a special committee of independent directors and by the board of directors of Eastman Chemical, is expected to close in Q3-2011 after receipt of required regulatory approvals and the satisfaction of other customary closing conditions. John V. Genova, Sterling’s President and Chief Executive Officer, stated that, “We believe that we are an excellent strategic fit for Eastman, especially given our existing plasticizer manufacturing assets. The many other quality attributes of our Texas City site has the potential of adding further future value. We look forward to working with Eastman to ensure a smooth and effective transition.” In connection with the transaction, Moelis & Company LLC acted as exclusive financial advisor and Alston & Bird LLP acted as legal counsel to the special committee of the board of directors of Sterling Chemicals and Akin Gump Strauss Hauer & Feld LLP acted as legal counsel to Sterling Chemicals. The transaction is subject to customary conditions, including applicable regulatory approvals. Investment Funds and other stockholders affiliated with Resurgence Asset Management, L.L.C., beneficially owning shares of Sterling Chemicals’ common stock and Series A Convertible Preferred Stock having the right to cast over 88% of the outstanding votes eligible to be cast with respect to the adoption of the merger agreement have executed a written consent to adopt the merger agreement.