TENNECO AND STERLING CHEMICALS SIGN AGREEMENT IN PRINCIPLE ON PULP CHEMICALS BUSINESS
TENNECO AND STERLING CHEMICALS SIGN AGREEMENT IN
PRINCIPLE ON PULP CHEMICALS BUSINESS
HOUSTON, March 23 /PRNewswire/ -- Tenneco Inc. (NYSE: TGT) and Sterling Chemicals, Inc. (NYSE: STX), today announced they have entered into an agreement in principle for a subsidiary of Sterling to purchase the pulp chemicals business of Albright & Wilson Americas, a Tenneco subsidiary. The sale price will be approximately Canadian $240 million, or U.S.$202 million, subject to adjustment for inventory and other working capital items.
"This sale will move us beyond our $2 billion action plan, which we completed in December, and keeps Tenneco on track in its restructuring strategy," said Mike Walsh, Tenneco president and chief executive officer. "We intend to proceed with the sale of other non-core assets, as well as various plans as we continue to strengthen Tenneco's balance sheet and focus on improving our core businesses."
"This agreement is a significant step in our corporate development plan of growth through acquisition of facilities that meet our long-term direction," said J. Virgil Waggoner, Sterling president and chief executive officer. "We have anticipated that opportunities would be available in the current depressed chemical market as other companies evaluated their existing businesses. We have been actively pursuing logical fits that could benefit from our management style and expertise in related businesses.
"This transaction meets our criteria. We like the people and the facilities. The product diversification should help Sterling dampen the economic impact of the significant cyclical swings that affect our current commodity chemical products," Waggoner said.
The pulp chemicals group includes sodium chlorate production facilities located in Vancouver, British Columbia; Grande Prairie, Alberta; Thunder Bay, Ontario; and, Buckingham, Quebec.
Also included in the sale are ERCO Systems Group which licenses and constructs large-scale generators used by the paper industry to convert sodium chlorate into chlorine dioxide for pulp bleaching, a sodium chlorite manufacturing plant at Buckingham and the business headquarters building in Toronto, Ontario.
Completion of the sale is subject to regulatory approval and reviews and approvals from Tenneco and Sterling, both based in Houston.
Sterling Chemicals is a major producer of seven intermediate petrochemical products -- styrene monomer, acrylonitrile, acetic acid, plasticizers, lactic acid, tertiary butylamine and sodium cyanide.
Tenneco is a diversified industrial company with major businesses interests in natural gas pipelines, farm and construction equipment, shipbuilding, automotive parts, packaging, chemicals and minerals.
/CONTACT: Christine LeLaurin of Tenneco, 713-757-2761, or J. David Heaney of Sterling Chemicals, 713-650-3700/
(TGT) (STX) CO: Tenneco Inc.; Sterling Chemicals, Inc. ST: Texas IN: CHM SU: TNM PS -- NY076 -- 0793 03/23/92 17:52 EST