Lion to buy EPDM and rubber chemicals businesses from Chemtura

Middlebury, Connecticut - Chemtura Corp. and Lion Copolymer, LLC have signed an asset purchase agreement concerning Chemtura's EPDM business, all Rubber Chemicals businesses associated with Geismar, Louisiana; and Flexzone antiozonants worldwide. The purchase price is $162.5 million (€125.5 million).

The transaction, which is expected to close by the end of the first quarter, is subject to regulatory approvals and a comprehensive financial audit. Chemtura said it will use the proceeds for the recently completed purchase of speciality lubricant producer Kaufman Holdings.

Subject to government approval and the actual completion of the sale, Lion also will purchase Chemtura's interest in Chemtura-CNCCC Danyang Chemical Co., Ltd. After the sale, Lion will have complete responsibility for the company, including operation of the Danyang, China, facility, which produces rubber chemicals. The approximately 190 employees who work at the Geismar and Danyang facilities are expected to become Lion employees, as are the approximately 25 sales, marketing and R&D personnel related to the businesses being sold.

Chemtura will continue to manufacture other rubber chemicals at a number of facilities around the world and will market them through its existing sales and distribution network and appropriate marketing agreements. The company did not say if these will be sold or not.

The EPDM and Rubber Chemicals businesses being sold had revenues for the 12 months ended Sept. 30, 2006 of approximately $300 million. The transaction will be slightly dilutive to Chemtura's 2006 and 2007 earnings.

Lion Copolymer is an affiliate of Lion Chemical Capital, LLC, a venture capital company specialising in chemical businesses. Lion owns Coploymer, the former DSM business, Kraton, which makes styrene block copolymers, as well as Excel Polymers, Celanese Corp. and Sonneborn Refined Products.

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Press release from Chemtura

Website of Lion Chemical