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SECURITIES AND EXCHANGE COMMISSION
Washington, D. C. 20549
Form 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of
the Securities Exchange Act of 1934
Date of Report (Date of earliest event reported): November 12, 1999
SOLUTIA INC.
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(Exact name of registrant as specified in its charter)
DELAWARE
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(State of Incorporation)
001-13255 43-1781797
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(Commission (IRS Employer
File Number) Identification No.)
575 Maryville Centre Drive, P.O. Box 66760, St. Louis, Missouri 63166-6760
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(Address of principal executive offices) (Zip Code)
(314) 674-1000
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Registrant's telephone number, including area code
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Item 5. Other Events
On November 11, 1999, Solutia announced that it has agreed to
acquire Morgan Grenfell Private Equity Ltd.'s ownership of Vianova
Resins of Mainz-Kastel, near Frankfurt, Germany. Vianova Resins,
formerly owned by Hoechst AG, is a leading European producer of resins
and additives for coatings and technical applications. The purchase
price is about DM 1.2 billion (about $640 million), and initially the
transaction will be financed with short-term debt. The acquisition is
expected to be completed later this year and is subject to EU Merger
Control Clearance as well as reaching agreement with certain minority
shareholders on the purchase of their shares. A copy of the press
release dated November 11, 1999, announcing the agreement is attached.
Item 7. Financial Statements, Pro Forma Financial Information and
Exhibits
(c) The following exhibit is filed as part of this report:
Exhibit Number Description
99.1 Press Release dated November 11, 1999, issued
by Solutia Inc.
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SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of
1934, the registrant has duly caused this report to be signed on its
behalf by the undersigned, thereunto duly authorized.
SOLUTIA INC.
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(Registrant)
/s/ Karl R. Barnickol
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(Secretary)
Date: November 12, 1999
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EXHIBIT INDEX
These Exhibits are numbered in accordance with the Exhibit Table
of Item 601 of Regulation S-K.
Exhibit
Number Description
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99.1 Press release dated November 11, 1999, issued by Solutia Inc.
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SOLUTIA TO ACQUIRE VIANOVA,
LEADING EUROPEAN RESINS PRODUCER
ST. LOUIS, MO, Nov. 11, 1999 -- Solutia Inc. (NYSE:SOI) announced
that it has agreed to acquire Morgan Grenfell Private Equity Ltd.'s
ownership of Vianova Resins of Mainz-Kastel, near Frankfurt, Germany.
Vianova Resins, formerly owned by Hoechst AG, is a leading European
producer of resins and additives for coatings and technical
applications. The addition of Vianova will position Solutia as the
clear leader in the worldwide market for coatings ingredients in the
automotive, industrial and specialty sectors. The purchase price is
about DM 1.2 billion (about $640 million), and initially the transaction
will be financed with short-term debt. Excluding any potential
restructuring charge, the acquisition is expected to be mildly dilutive
in the first year, but accretive thereafter. The acquisition will
immediately provide strong positive cash flow for Solutia.
John Hunter, Solutia chief executive officer and president,
explained, "The acquisition of Vianova Resins represents an important
step in our strategy to improve the growth rates and profitability of
Solutia's business portfolio, and to move us towards being a $5 billion
enterprise in the next five years. Vianova is a technology leader which
complements our current position in the performance coatings ingredients
market by securing technologies that enhance our position in fast-
growing segments such as waterborne and powder coating systems.
"This acquisition more than doubles our sales in Europe, adding
the kind of branded, market leading products, technologies, and
technical customer service capabilities that are the hallmarks of
Solutia's portfolio," Hunter said. "With the Vianova acquisition,
Solutia is creating a product portfolio and geographic presence that
will be unmatched by any other supplier to the performance coatings
market."
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The combined coatings ingredients platform will drive revenue
growth of about five percent per year. New technologies in powder and
waterborne products will grow even faster, at eight to ten percent
annually.
Solutia plans to combine its existing coatings performance
materials business with Vianova. "This combination of businesses
creates a unique new player in the market," said Bob Toth, vice
president and general manager of Solutia's Resins businesses. "This
gives us the ability to be a full service supplier to our coatings
customers. Solutia will be the premier merchant supplier of resins and
additives for the automotive, industrial and specialty coatings
markets," Toth said.
Solutia ultimately expects to achieve cost synergies of about
$20 million per year, which will enable the business to achieve a target
of 15 percent operating margins. The cost synergies and revenue growth
will contribute to this acquisition becoming clearly accretive in year two.
The benefits for Vianova are also clear. "The reintegration of
Vianova Resins into a successful and well acknowledged chemical
corporation will provide Vianova Resins and its employees with an
improved platform for all operations and launch of our high performance
and environmentally advantageous products worldwide," stated Dr. Helmut
Strametz, Vianova's president and CEO.
Approximately 85 percent of Vianova's sales are in Europe with
such well-known brands as Resydrol waterborne alkyd resins, Maprenal
amino resins, Viacryl and Macrynal acrylic resins, Viaktin UV curing
resins, Vialkyd alkyd resins, Beckopox epoxy resins and Alftalat and
Synthacryl solid resins for powder coatings. Other branded products
include Daotan polyurethane emulsions and Additol dispersing and rheology
control additives. Vianova has subsidiaries in Austria, Belgium, Denmark,
France, Germany, Greece, Italy, the Netherlands, Portugal, Spain, Turkey
and the United Kingdom. It also has affiliates in Brazil, Canada, Korea,
Thailand and the United States. Vianova employs approximately 1,650
people. Its 1998 sales totaled DM 940 million (about $500 million).
Solutia's current coatings ingredients product line includes
Resimene amino crosslinkers for thermoset surface coatings; Modaflow
flow and leveling agents; Santosol environmentally-friendly solvents;
and Butvar binding resins. To date, these Solutia products have been
sold primarily in North America.
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By combining the two product portfolios, Solutia will be able to
offer customers a single source for a broad range of coating resins
technologies. "We are eager not only to market our Solutia brands in
Europe, but more importantly to introduce Vianova's well known European
brands to the U.S. In addition, the combined product portfolio will
give coating resins customers in Asia and South America access to
superior products supplied from regional manufacturing facilities, as
well as formulation technology from regional technical centers of
excellence," Toth added.
The acquisition is expected to be completed later this year and is
subject to EU Merger Control Clearance as well as reaching agreement
with certain minority shareholders on the purchase of their shares.
Solutia (1998 sales of approximately $2.8 billion) serves
customers in the construction, automotive, industrial products and home
furnishings markets. It operates plants in North America, Europe, South
America and Asia. Solutia was advised in this transaction by Chase
Manhattan plc.
This press release contains forward-looking statements, including
statements regarding the effect the acquisition of Vianova Resins is
expected to have on the sales, earnings, growth rate, and profitability
of Solutia. These forward-looking statements involve certain risks and
uncertainties. Factors that may cause actual results to differ
materially from those contemplated include the following possibilities:
greater than expected costs or difficulties in integrating the business,
world economic conditions, competitive pressures, and raw material
pricing, and other factors identified in Solutia's Report on Form 10-Q
filed with the Securities and Exchange Commission for the period ended
September 30, 1999.
For more information, Vianova's website is www.vianova-resins.com,
or visit the Solutia website at www.solutia.com where there will be a
link provided to the Vianova website.
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Note to Editors: Resimene, Modaflow, Santosol, and Butvar are registered
trademarks of Solutia Inc. Resydrol, Maprenal, Viacryl, Macrynal, Vialkyd,
Viaktin, Beckopox, Additol, Alftalat, Daotan, and Synthacryl are registered
trademarks of Vianova Resins GmbH and Co. KG.
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FACT SHEET: SOLUTIA TO ACQUIRE VIANOVA RESINS
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"The acquisition of Vianova Resins MANUFACTURING LOCATIONS
represents an important step in our Germany
strategy to improve the growth rates and Fechenheim, Hamburg,
profitability of our business portfolio. Wiesbaden
The addition of Vianova to Solutia's Austria
portfolio will: Werndorf
- -- Make Solutia the clear leader in Italy
performance coatings ingredients for Romano d'Ezzelino
the automotive, industrial and France
specialty sectors. Dijon
- -- Make Solutia a global supplier to Spain
the coatings industry, able to La Llagosta
leverage Vianova's product line in Denmark
North America, expand Solutia's S'borg
product positions in Europe, and Brazil
develop the emerging markets in Asia Suzano
and Latin America; Thailand
- -- Create a coatings ingredients Rayong
platform which can drive revenue OFFICE LOCATIONS
growth rates 5%, with higher growth Germany
rates of 8-10% in new waterborne and Mainz-Kastel
powder technologies; Italy
- -- Ultimately provide cost synergies of Milan
some $20M which will enable our Belgium
target of at least 15% operating Brussels
margins and contribute to this the Netherlands
acquisition becoming clearly Amsterdam
accretive in year two; and United Kingdom
- -- More than double Solutia's sales in Hounslow
Europe, adding branded, market United States
leading technologies and strong Charlotte, NC
technical service capabilities that Brazil
are hallmarks of Solutia's portfolio." Sao Paulo
Solutia CEO and President John Hunter. Thailand
Bangkok
"The reintegration of Vianova Resins Korea
into a successful and well acknowledged Seoul
chemical corporation will provide Vianova
Resins and its employees with an improved 1998 SALES: DM940 million ($500M)
platform for all operations and the launch
of our high performance and environmentally EMPLOYEES: 1650
advantageous products worldwide."
Helmut Strametz, Vianova's president and CEO. BRANDED PRODUCTS: Resydrol waterborne
alkyd resins; Maprenal amino resins;
Viacryl and Macrynal acrylic resins;
Viaktin UV curing resins; Vialkyd alkyd
resins; Beckopox epoxy resins; Alfalat
and Synthacryl solid resins for powder
coatings; Daotan polyurethane
emulsions; and Additol dispersing
and rheology control additives.
WEBSITE: www.vianova-resins.de
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