Eastman Chemical Co. has reached a definitive agreement to sell its wholly owned Arkansas chemicals and biofuels subsidiary to Viceroy Acquisition Corp. for $75 million. The sale of Eastman SE Inc. and its 408-employee manufacturing facility in Batesville, Ark., is expected to close in the fourth quarter of 2006, subject to regulatory approval.

Viceroy Acquisition is a Clayton, Mo.-based company that is aggressively pursuing purchases in certain segments of the oil and gas industry in the U.S. and Europe, particularly involved in alternative fuels, including biodiesel and ethanol.

"The Arkansas facility has been an important part of Eastman's business since the late 1970s," said Jim Rogers, president of Eastman Chemical Co. and head of the company's chemicals and fibers business group. "However, it does not fit with the company's current strategy of driving growth in our core businesses and on taking full advantage of new growth opportunities. This divestiture will result in a better alignment of company resources with our strategy," he said.

Eastman SE makes specialty organic chemicals for Eastman's performance chemicals and intermediates segment. The Batesville plant also makes and markets biodiesel fuels.

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