Under terms of the agreements, Honeywell will sell its engineering plastics business to BASF and will acquire BASF's nylon fiber business. Honeywell will receive $170 million in cash and all of BASF's nylon fiber business at closing. Honeywell will pay $80 million to BASF within one year of the transaction's close.
Honeywell expects increased utilization of its Hopewell, Va., caprolactam manufacturing facility that will supply nylon feedstock to the combined business as well as its fiber and plastics customers. The company added that it will retain its nylon films business and all of its specialty chemicals operations.
The transactions are expected to close in the first half of 2003, subject to regulatory approval in several jurisdictions.
"The combination of Honeywell's and BASF's nylon fiber businesses will result in greater economies of scale and increased cost synergies providing a stronger, more valuable business with more strategic opportunities and flexibility in the future," said Nance Dicciani, President and CEO of Honeywell Specialty Materials.
The nylon transaction will include fiber and polymerization manufacturing plants, research facilities and sales offices in North America from both companies, with manufacturing plants in South Carolina, Virginia, Canada and China. The businesses currently employ approximately 1,600 BASF personnel and 2,500 Honeywell personnel. It also includes a nylon carpet fiber business that serves the commercial, automotive and residential markets; textile products, including a diversified line of nylon yarns for apparel fabrics; nylon, for automotive headliner fabrics; and solution dyed Zeftron 200 nylon, for upholstery fabrics.
BASF's fiber intermediates plants in Freeport, Texas, and Enka, N.C., as well as its related facilities outside North America (except the Hua Yuan nylon carpet fibers plant in Shanghai, China), are not included in the sale.
The agreement covers polymerization and compounding facilities, research and development assets and sales and technical service locations in North America, Europe and Asia. The Honeywell business currently employs about 500 people.