Philadelphia, Pa--Sunoco, Inc. (NYSE: SUN) has reached an agreement to sell its subsidiary Sunoco Chemicals, Inc., comprised of its polypropylene business, to Braskem S.A. (NYSE: BAK), producers of petrochemicals and thermoplastic resins in the Americas, for approximately $350 million in cash. The sale will include assets and inventory attributable to the polypropylene business, subject to a market-based working capital adjustment at the time of closing. The transaction is subject to regulatory approval and customary closing conditions, and is expected to close on or before March 31, 2010.
Included in the sale are Sunoco’s polypropylene manufacturing facilities in Marcus Hook, Pennsylvania; La Porte, Texas; and Neal, West Virginia, which have the combined capacity to produce approximately 2.1 billion pounds of polypropylene annually. The sale also includes Sunoco’s Research and Technology Center located in Pittsburgh, Pennsylvania.
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Sunoco will retain its phenol and derivatives business, which has manufacturing assets located in Philadelphia, Pennsylvania and Haverhill, Ohio.
Sunoco expects to record a pre-tax loss on the sale in the first quarter of 2010 of approximately $185-$195 million.
Sunoco also permanently shut down its previously idled Eagle Point refinery in Westville, New Jersey due to continuing weak demand for refined products and unfavorable market conditions. Processing units at Eagle Point were idled in early November 2009 and have now been permanently shut down. However, refined product storage and handling operations there will continue. In addition, Sunoco is exploring a number of options for using the site in the future, including as a potential center for biofuels production. The shutdown is not expected to have a material financial impact on the company beyond what has previously been recorded in 2009.
Employees furloughed after the refinery was idled are eligible for a severance program that includes job placement assistance and retraining, as well as a continuation of medical benefits for the length of the severance.
Sunoco, Inc. headquartered in Philadelphia, PA, is a manufacturer and marketer of petroleum and petrochemical products.
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