US-based Eastman Chemical has agreed to acquire specialty chemicals group Solutia in a deal worth around $4.7 billion, including Solutia's debt, the companies said in a joint statement Friday.
Under the agreement, Solutia shareholders will get $22 in cash and 0.12 shares of Eastman shares for each Solutia share they hold.
The transaction, which was approved by the boards of both companies, will have to secure the consent of Solutia shareholders and antitrust regulators. It is expected to be completed by mid-2012.
Jim Rogers, chairman and CEO of Eastman, said the acquisition would boost its position as a "top-tier specialty chemical company with strong, stable margins."
He added that the acquisition is also a significant step in the company's strategy to accelerate its growth ambitions in the Asia Pacific, where it hopes to achieve a compound annual growth rate of "approaching 10%" over the next several years.
Eastman said it expects the deal, once completed, to be immediately earnings accretive, with EPS expected to be at around $5, excluding acquisition-related costs and charges.
It added it is also increasing EPS for 2013 to "greater than $6", and has identified annual cost synergies of around $100 million that it expects to be achieve by end-2013.
