Eastman Will Acquire Amines Maker Taminco

Eastman Chemical has agreed to purchase the amines specialist Taminco for a total consideration of $2.8 billion, including $1 billion in debt.

Taminco calls itself the world’s largest producer of alkylamines and alkylamine derivatives. In fact, its very name is a portmanteau of “The Amines Company.”

The firm was cobbled together over the past decade through the purchase of amines businesses from Air Products & Chemicals, AkzoNobel, Arkema, and UCB. It went public in 2013, a year when it racked up $138 million in earnings on $1.2 billion in sales.

“Basically, we are adding another attractive stream to Eastman,” Eastman CEO Mark J. Costa told analysts on a Sept. 11 conference call. Eastman’s current core chemistries include acetyls, oxo chemicals, and polyesters.

Costa also sees the opportunity for the two firms to cross-pollinate. For example, Taminco does $700 million a year in business in food, feed, and agriculture markets. He says Eastman, a much larger firm, only has about $300 million in business in these areas. Similarly, Eastman will help Taminco penetrate the coatings and rubber additives sectors.

The main raw materials Taminco uses are methanol, ammonia, and ethylene oxide. Costa says Eastman’s purchasing power will help save on purchases of methanol and ammonia. Its own ethylene oxide production and surplus ethylene output should help back-integrate Taminco.

Eastman’s proposed tender offer of $26.00 per share represents a premium of about 9% over Taminco’s closing price the day before the transaction was unveiled. Taminco has 30 days during which it can entertain more attractive offers for the company.

In early trading after the merger was announced, Taminco shares were being sold for more than $26.00, an indication that some shareholders are betting a better offer will emerge.