Chemtura to sell EPDM and rubber chemicals businesses
Canadian PlasticsCanadian Plastics
Plastics additives manufacturer Chemtura Corporation has signed a letter of intent to sell its ethylene propylene d...
Plastics additives manufacturer Chemtura Corporation has signed a letter of intent to sell its ethylene propylene diene monomer (EPDM) business, and the rubber chemicals businesses associated with its Geismar, La. facility and its Flexzone rubber antiozonants worldwide.
The name of the buyer was not disclosed. The parties are working toward a definitive agreement, which is expected to be signed by the end of the year subject to regulatory approvals, Chemtura said.
Proceeds from the sale will be used primarily for Chemtura’s debt reduction.
“This sale is an important milestone in our plan to divest non-core assets and businesses. We are pleased to be transferring these businesses to a buyer who is interested in growing them, which should benefit our customers,” Robert L. Wood, Chemtura Chairman and CEO, said.
The EPDM and Rubber Chemicals businesses being sold had revenues for the twelve months ended Sept. 30, 2006 of approximately US$300 million.
The Geismar facility employs approximately 450 workers. “We believe this is going to be a very positive thing for our company and our community,” Keith Baggett, plant manager, said. “We’re very pleased. We don’t know who the buyer is, but we’re very pleased at the prospects.”
As part of the same divestment strategy, Chemtura announced last month that it was selling its majority interest in a Davis-Standard, LLC polymer processing equipment joint venture that it had entered into to partner Hamilton Robinson LLC for approximately US$72 million in cash, plus an additional $8 million that is contingent upon certain post-closing determinations.
Chemtura Corporation, which reported 2005 sales of US$3.9 billion, is a global manufacturer and marketer of specialty chemicals, crop protection and pool, spa and home care products. The company is based in Middlebury, Conn., and has Canadian operations headquartered in West Hill, Ont.