Eastman Chemical to sell Texas City Operations for $490M, sees accretion

Eastman Chemical announced it has entered into a definitive agreement to sell its Texas City Operations, located in Texas City, Texas, to INEOS Acetyls, a global manufacturer and supplier of acetic acid and related chemicals owned by the INEOS Group. Texas City Operations is currently part of Eastman’s Chemical Intermediates segment. Eastman will retain ownership of its plasticizer business at the site, which INEOS will operate for Eastman as part of this agreement. Eastman and INEOS have also entered into a memorandum of understanding to explore options for a long-term agreement for supplying vinyl acetate monomer to Eastman. The total sale price of $490M consists of approximately $415M cash at closing and the remainder in equal installments on the first and second anniversaries of the closing. The final purchase price is subject to working capital and other customary adjustments at closing. Proceeds from the divestiture in the near term are expected to be used for debt repayment. The company expects the sale to be accretive to adjusted earnings per share in 2024. The sale, subject to regulatory approvals and satisfaction of other customary closing conditions, is expected to be completed in the fourth quarter of 2023. The agreement contains customary representations, warranties, and covenants of both parties. Beginning in the third quarter of 2023 and until sale, the assets of the Texas City acetyl operations will be reported as held for sale.