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Alfa's DAK Americas to buy Eastman's PET Business
Oct '10
ALFA S.A.B. de C.V. (ALFA), the Mexican industrial company, announced that its subsidiary DAK Americas, LLC has agreed to acquire the integrated PTA and PET business of Eastman Chemical Company (“Eastman”). Total consideration for the transaction is expected to be approximately U.S. $600 million, with the final purchase price subject to working capital adjustments at closing.

The acquisition comprises three integrated petrochemical plants located in South Carolina, U.S.A., with a total annual capacity of 1.275 million tons, one producing PTA and the other two producing PET. The operation also includes the intellectual property of the IntegRex PTA and PET technology, as well as access to the business' wide customer base. Through six months 2010, ALFA estimates the South Carolina site generated sales revenue of U.S. $405 million and EBITDA of U.S. $46 million on a pro-forma basis. The plants employ 415 people.

Commenting on the transaction, Armando Garza Sada, Chairman of the Board of ALFA, said: “This strategic acquisition reinforces our presence in the North American PTA and PET markets, where we supply some of the most important companies in consumer segments such as beverage, food and personal care, which have traditionally been resilient to economic cycles. With this acquisition, we demonstrate once again our commitment to the PTA and PET value chains.”

Alvaro Fernandez, President of ALFA, added: “This acquisition will allow us to continue to grow with our customers and to better serve their needs through an expanded range of assets, products and technologies. Moreover, our 30-year experience operating petrochemical plants will allow us to extract value for us and for our customer base from this operation.”

PTA is a raw material for polyester, in any of its presentations. PET is a derivative of PTA used for the production of plastic bottles and other applications in consumer markets.

The transaction is expected to close during the fourth quarter of this year, and is subject to regulatory approvals by U.S. authorities, and satisfaction of other customary closing conditions.

ALFA is a Mexican company comprising four business groups: Alpek (petrochemicals), Nemak (high tech aluminum auto components), Sigma (refrigerated food) and Alestra (telecommunications). ALFA is the world's leading manufacturer of high-tech aluminum engine heads and blocks.

ALFA S.A.B. de C.V. (ALFA)

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