NEWS OF THE WEEK BUSINESS
SOLUTIA SELLING BIG UNIT TO UCB
COVERED UCBP which provided coatings resins for Fox Studio in Sydney, Australia, strengthens its position in powder coatings with Solutia acquisition.
Resins, adhesives, and additives are shed to shore up finances EEKING TO IMPROVE A PRE-
S
carious financial situation, Solutia has agreed to sell its additives, adhesives, and resins businesses to UCB, the Belgian pharmaceutical and chemical firm, for $500 million plus a $10 million exclusivity fee. The units involved employ roughly 1,700 people and had sales of more
than $400 million in the nine months ending Sept. 30, almost 20% of Solutia's total sales. The biggest piece of business being sold is the former Vianova Resins, a one-time Hoechst unit that Solutia bought just three years ago for $640 million. Other pieces, such as Resimine amino cross-linkers, are longtime Solutia holdings. Solutia CEO John C. Hunter III says the deal will allow the company to pay down a substantial amount of debt. "With a much improved debt structure, Solutia will have greater flexibility to deal with future business risk and uncertainty," he says.
BUSINESS
ASBESTOS SNARES TWO MORE FIRMS
IN BRIEF: ACS ELECTION
Owners of former WR. Grace businesses will have to ante up millions
The ACS Council Policy Committee met on Dec. 5 in conjunction with the ACS Board of Directors meeting to consider E. Ann Nalley's challenge to the presidential election (C&EN, Nov. 25, page 5). CPC determined that the election results will stand as certified. Charles P. Casey, Homer B. Adkins Professor of Chemistry at the University of Wisconsin, Madison, will be 2003 president-elect.
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tos claims explosion has forced two companies to kick in millions of dollars to help settle claims against W.R. Grace. Sealed Air, which bought Grace's Cryovac food packaging business in 1998 for $1.2 billion, will contribute more than $830 million in cash and stock to a trust to pay claims against Grace. Germany's Fresenius, which bought Grace's kidney dialysis unit for $2.5 billion in 1996, will fork over $15 million. Grace's troubles stem from a 9,
2002
spray-on asbestos fireproofing material it once sold. The firm filed for reorganization under US. bankruptcy laws in April 2001 as asbestos claims against it exploded. To bolster the kitty reserved for asbestos claimants as part of the reorganization, a bankruptcy committee working on behalf of claimants sued to recover the value of assets sold to Sealed Air and Fresenius. The committee succeeded in wrangling a settlement from the two firms by advancing a complex legal argument. They charged that
Part of that uncertainty is Solutia's exposure to lawsuits over polychlorinated biphenyls, the now-banned heat-transfer fluid once made by Monsanto, Solutia's former parent company Publicity surrounding PCBs made Solutia's debt refinancing earlier this year a touch-and-go process (C&EN, Oct. 28, page 22). For UCB, the purchase more than doubles the size of a chemical business that mainly makes resins for radiation-cured and powder coatings. UCB is also a major producer of polypropylene and cellulose films. Following the acquisition, set for completion early next year, UCB will combine its chemical and films units into a new surface specialties business with annual sales of more than $1.5 billion. UCB C E O Georges Jacobs emphasizes that pharmaceuticals remains UCB's core business. He is counting on surface specialties to generate cash that can be used to expand the pharma unit. — MICHAEL MCCOY
Grace "fraudulently transferred" assets to new owners when it was technically bankrupt because of asbestos claims. A source familiar with the court case involving Sealed Air and Fresenius says, "The judge put intense pressure on the parties to reach a settlement." While too late to help companies involved in existing or pending bankruptcy suits, legislation tackling the asbestos monster—which has also affected firms such as Dow Chemical and Eastman Chemical—is likely according to David T Austern, general counsel for Claims Resolution Management Corp., a for-profit company that manages toxic tort payouts. At a recent speech in N e w a r k City, Austern said compensation for claimants without serious health impairments could be disallowed and corporate liability— now estimated at $100 billioncould decline if Congress passes the legislation.—MARC REISCH HTTP://PUBS.ACS.ORG/CEN
