Feb 16 2007
Peter R. Huntsman, President and CEO of Huntsman Corporation, today announced that Huntsman has signed definitive documents with Flint Hills Resources, LLC, a wholly owned subsidiary of Koch Industries, Inc., for Flint Hills Resources to acquire Huntsman's U.S. Base Chemicals and Polymers business.
Huntsman is expected to realize a total value from the sale of approximately $761 million. Under the agreement, Flint Hills Resources will acquire the manufacturing assets of Huntsman's U.S. commodities business for $456 million in cash plus the value of inventory ($286 million at Dec. 31, 2006) on the date of closing. Huntsman will retain other elements of working capital, including accounts receivables, accounts payable and certain accrued liabilities (net, $19 million at Dec. 31, 2006), which will be liquidated for cash immediately following the closing.
The transaction includes Huntsman's olefins and polymers manufacturing assets located at five U.S. sites: Port Arthur, Odessa and Longview, Texas; Peru, Illinois; and Marysville, Michigan. The business employs about 900 associates. The captive ethylene unit at the retained Port Neches, Texas, site of Huntsman's Performance Products division is not included in the sale. This asset, along with a long-term post-closing arrangement for the supply of ethylene and propylene from Flint Hills to Huntsman, will continue to provide feedstock for Huntsman's downstream derivative units.
"Upon the closing of the transaction we announced today, Huntsman Corporation will have completed its planned divestitures of its commodity petrochemical businesses and its transformation to a company manufacturing and marketing differentiated products. Our entire product line will now experience higher growth rates and much lower sensitivity to energy costs," said Peter Huntsman. "Looking forward, we have transformed our business into one producing highly innovative products that serve an expanding global economy."
Mr. Huntsman added, "We also are very pleased to be passing the baton to as strong and experienced an operator for these types of assets as is Flint Hills Resources."
"We are excited about this proposed acquisition and its natural extension of our existing capabilities in petrochemical manufacturing and marketing," said Brad Razook, president and chief executive officer of Flint Hills Resources, which is based in Wichita, Kan. "These assets offer us new opportunities for continued growth and diversification, as well as for creating customer value. Once the acquisition concludes, we expect to position these plants for long-term success in the ever-changing global market."
"The assets, skills and capabilities of this operation will complement FHR's existing framework," said Jeff Ramsey, who upon the acquisition's close will manage the business. Ramsey is vice president of chemicals for FHR. "We are acquiring an experienced team, a robust technical service and development capability and a global customer service function that is focused on creating value."
Subject to customary regulatory approvals and other closing conditions, the transaction is expected to close during the third quarter of 2007 following the re-start of Huntsman's Port Arthur, Texas, olefins manufacturing facility.