News of the Week share would be exchanged for Allied securities consisting of 1.1 shares of Allied common stock and, on a fully distributed basis, $27.50 in value of Allied fixed income securities. If it acquires Bendix, Allied also would own the 70% of Martin Marietta stock that Bendix now controls. Allied says that it would acquire the remaining 30%. According to Hennessy, the cost of the entire Bendix-Martin Marietta package to Allied would be about $2.3 billion. Since early in 1981, Allied has had a $2 billion line of credit with a consortium of banks. Under the pact, Bendix would sign an agreement to sell to Allied, subject to certain conditions, its aerospace electronics group—not including its electric connector business— for $800 million in cash. Under this separate agreement, Allied would acquire this group whether or not the merger is consummated. This agreement could be crucial to the success of any Allied bid for Bendix. Aerospace electronics is a key Bendix group and it is the part of Bendix that is desired by other companies. If Allied obtains the group, other companies may not be so quick to bid for Bendix. These other bidders include Martin Marietta, which now owns 44% of Bendix stock, and United Technologies, which has stated it will bid for Bendix, but whose tender offer currently is held up by the Federal Trade Commission. Martin Marietta and United Technologies have agreed to split Bendix if either one of them acquires it. Hennessy says of the proposed Allied deal, "We are excited by the growth prospects i n h e r e n t in a merger of Bendix and Martin Marietta's aerospace electronics groups with our own electronic operations and technologies." And he has some reason to feel excited. With the merger, Hennessy would be changing the face of Allied. Currently the company's largest contribution to sales comes from chemicals, fibers, and plastics. In 1981, these divisions made up more than 41% of Allied's sales. Their share would drop to about 21% if the merger is completed. So Allied would change from being predominantly a chemical company to being most notably an aerospace and electronics manufacturer. Aerospace and electronics, if the proposed merger goes through, would account for about 31% of sales, based on 1981 results of the three companies. • 6
C&EN Sept. 27, 1982
New mattress system is fire resistant A fire-retardant mattress and foundation system for hotels and motels, claimed to be the first of its kind, has been introduced by Sealy of Chicago. The company used a combination of fire-retardant chemistry and materials design to develop a system that would not only resist cigarette ignition as required by federal regulations, but also delay involvement in a fire burning elsewhere in a room. The new system took four years of testing to develop, points out Howard G. Haas, Sealy president. Among the first customers is Americana Hotels, also of Chicago, which will purchase fire-retardant mattress and foundation sets for all 15,000 of its rooms at 44 locations worldwide. The key to fire retardancy in the system is complete encapsulation of mattress and foundation in neoprene foam bonded to glass cloth, according to Al Klancnik, vice president for manufacturing services at Sealy. The laminate keeps oxygen from entering and flammable pyrolysis gases from escaping from the mattress, he explains. Ignition of pyrolysis gases seeping out of the mattress spreads the fire to the mattress in an effect called flashover. The neoprene foam is compounded with aluminum trihydrate, animony oxide, and char-enhancing additives. Aluminum trihydrate releases moisture on heating. Antimony oxide coreacts with the 40% chlorine content of neoprene as a fire-retarding combination. Char formation further insu-
Haas: four years of testing
lates mattress interiors from external fire. Klancnik emphasizes that the system is not completely fireproof. The aim is to delay spread of a room fire to the mattress to give fire fighters added time to arrive and put out the blaze. U.S. mattresses have had to pass federal regulations on resistance to ignition by cigarettes for about 10 years. Sealy's concern, which led to the present development, was that the mattress and foundation should resist adding fuel to a fire already started elsewhere in the room. Beneath the neoprene foam-glass cloth laminate, mattresses are constructed in a conventional manner. There is 0.5 inch of polyurethane foam under the laminate. Beneath the polyurethane is 1 inch of cotton felt impregnated with boric acid, which is a fire retardant. In the center are inner springs. Sealy has no marketing plans for now beyond hotels and motels. One possible barrier to sales to homes is price. Sealy's prices for the new firebarrier mattresses will average 70% higher than those for conventional ones. If retail stores eventually do offer barrier mattresses with their own markups added on, relative price differences may be less. •
Du Pont to sell oil and gas properties When t h e big Du Pont-Conoco merger became effective, Du Pont stated that over the next couple of years it wanted to sell about $2 billion in assets to help reduce the debt it ran up in the acquisition. And it has moved well along toward that goal with the proposed sale of its interests in a number of oil and gas fields. Last week Du Pont reached an agreement in principle to sell interests in 29 major producing oil and natural gas fields to Petro-Lewis Corp. for $772 million. The transaction includes 100% of Conoco's interests in four offshore fields and 24% of Conoco's interests in 25 onshore fields. About 8.4% of Conoco's interests in the onshore properties will revert to Conoco when Petro-Lewis has received 250% of the purchase price attributable to the offshore properties or on Jan. 1, 1993, whichever comes first. PetroLewis will retain a 15.6% interest in the onshore properties after the reversion. •
