Eastman Chemical Co. (EMN) reached a definitive agreement to acquire Solutia Inc. (SOA), pursuant to which Solutia stockholders would receive $22.00 in cash and 0.12 shares of Eastman for each Solutia share. Based on yesterday's closing prices, Solutia shareholders would receive cash and stock valued at $27.65 per Solutia share, representing a premium of 42 percent and a total transaction value of about $4.7 billion, including the assumption of Solutia's debt.
Eastman expects the transaction to be immediately accretive to earnings, excluding acquisition-related costs and charges. After giving effect to the acquisition of Solutia, including expected cost synergies, Eastman expects 2012 earnings per share to be about $5, excluding acquisition-related costs and charges. Further, Eastman is raising its 2013 earnings per share expectation to greater than $6.
Also, Eastman plans to finance the cash portion of the purchase price via. a combination of cash on hand and debt and the transaction may close in mid-2012.
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