Eastman to Acquire Genovique Specialties
March 26, 2010
KINGSPORT, TN – Eastman Chemical Co. has entered into a definitive agreement to acquire Genovique Specialties Corp., a leading global producer of specialty plasticizers, benzoic acid and sodium benzoate. The acquisition will establish Eastman as a global leader in non-phthalate plasticizers for both general purpose and specialty markets. Terms of the transaction were not disclosed.
The transaction is expected to be accretive to Eastman’s full-year 2010 earnings per share. Following the completion of the transaction, Genovique Specialties, including its manufacturing operations in Chestertown, MD, Kohtla-Järve, Estonia, and its joint venture in Wuhan, China, will become part of Eastman's Performance Chemicals and Intermediates (PCI) segment.
Regulatory changes and shifting consumer preferences are driving rising demand for non-phthalate solutions in the approximately $9 billion worldwide plasticizer market. This growing demand for non-phthalate alternatives is expected to increase volumes of non-phthalate plasticizers at a compounded annual rate of seven percent over the next five years in North America and Europe. Demand is also increasing in emerging markets for products manufactured for export to developed countries, where regulations favor the use of non-phthalate plasticizers.
Eastman is currently a supplier in North America and Europe of general-purpose non-phthalate plasticizers for flexible PVC applications. With 2009 revenues of approximately $135 million, Genovique Specialties is a global producer of specialty non-phthalate plasticizers based on benzoic acid for water-based adhesives, a new product line for Eastman. Genovique’s production and distribution capabilities and customer relationships in Europe and Asia also enhance Eastman’s diversification in regions targeted for growth.