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Basic Materials Sector Review: Eastman Transaction Expectations, OMNOVA 4Q Earnings

January 28 2012 Tweet Email This

Eastman Chemical Company (NYSE:EMN): Eastman expects the transaction to be immediately accretive to earnings, excluding acquisition-related costs and charges. Eastman has identified annual cost synergies of approximately $100M that are expected to be achieved by year-end 2013. Further, Eastman expects to realize significant tax benefits from Solutia’s historical net operating losses and other tax attributes that are expected to contribute to free cash flow of approximately $1B through 2013. The transaction, which was approved by the Boards of Directors of both companies, remains subject to approval by Solutia’s shareholders and receipt of required regulatory approvals as well as other customary closing conditions. The transaction is expected to close in mid-2012.

The shares closed at $50.41, up $3.29, or 6.98%, on the day. Its market capitalization is $6.91 billion.

OMNOVA Solutions Inc. (NYSE:OMN) reported Q4 revenue $301.4M vs. consensus $285.30M.

The shares closed at $5.16, down $0.31, or 5.67%, on the day. Its market capitalization is $237.33 million.

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