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Investor Contact:Richard E. Koch
(203) 750-3254
Press Contact:Thomas J. Fitzgerald
(203) 750-3831
Olin News
Olin Corporation, P.O. Box 4500, 501 Merritt 7, Norwalk, CT 06856-4500
FOR IMMEDIATE RELEASE
Olin and Occidental to Form Chlor Alkali Partnership
NORWALK, CT, June 28, 2000 -- Olin Corporation said today it signed a
letter of intent with Occidental Petroleum Corporation to combine the
companies' chlor-alkali and related businesses in a partnership with annual
sales of approximately $1.2 billion. Occidental's OxyChem subsidiary would own
about two-thirds of the venture, and Olin one-third of the venture.
Donald W. Griffin, Olin Chairman, President and Chief Executive Officer
said, "We believe that our chlor-alkali assets will have greater long-term
value as a result of the formation of this partnership. The combination of
Olin's and Occidental's chlor-alkali operations will result in a more
competitive chlor-alkali business offering a breadth of manufacturing and
shipping options to better serve a wide variety of customers and end users on
a global basis. There are numerous opportunities to achieve significant
production and distribution efficiencies which are absolutely critical to the
success of this highly competitive commodity business."
It is estimated that at least $60 million of annual savings will be
achieved by the partnership within two years, with opportunities for even
higher savings over the long run. The $60 million of anticipated savings will
be shared equally by the parties with additional synergies to be shared based
on the parties' relative ownership interests.
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(more)
The partnership, to be based in Dallas, Texas, will have an annual
capacity of 4 million tons of chlorine, 4.1 million tons of caustic soda and
425,000 tons of potassium hydroxide.
The venture will include:
o Certain of Oxychem's chlor-alkali, ethylene dichloride, potassium
hydroxide and related co-product businesses and facilities, its
interest in an Armand Products partnership in Alabama and its
Carbocloro joint venture in Brazil.
o Olin's chlor-alkali, sodium and potassium hypochlorite, and sodium
hydrosulfite businesses and facilities in the United States and
Brazil, and its interest in the Sunbelt joint venture with The Geon
Company.
Definitive agreements are expected to be completed shortly. The formation
of the partnership is conditioned on execution of definitive agreements,
completion of any necessary regulatory reviews and other customary closing
conditions, including approval by each company's board of directors. The
parties plan to initiate the regulatory review process before the end of June.
Formation of the partnership is expected during the fourth quarter. Olin's
earnings per share are expected to increase by $.40 on an annualized basis
before the end of 2002.
Olin also announced that it will resume its share repurchase program in
the future when the terms and conditions of the definitive agreements are
finalized and disclosed.
Headquartered in Norwalk, Connecticut, Olin Corporation had 1999 sales of
$1.3 billion and approximately 6,700 employees. The company is a leading North
American producer of copper and copper-based alloys, sporting ammunition and
chlorine and caustic soda. Olin's chlor-alkali division had 1999 sales of $273
million and employs approximately 900 people.
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Except for historical information contained herein, the information set forth
in this communication contains forward-looking statements that are based on
management's beliefs, certain assumptions made by
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management and current expectations, estimates and projections about the
markets and economy in which Olin and its respective divisions operate. Words
such as "anticipates," "expects," "believes," "should," "plans," "will,"
"estimates," and variations of such words and similar expressions are intended
to identify such forward-looking statements. These statements are not
guarantees of future performance and involve certain risks, uncertainties and
assumptions ("Future Factors") which are difficult to predict. Therefore,
actual outcomes and results may differ materially from what is expected or
forecasted in such forward- looking statements. Olin does not undertake any
obligation to update publicly any forward-looking statements, whether as a
result of future events, new information or otherwise. Future Factors which
could cause actual results to differ materially from those discussed include
but are not limited to: general economic and business and market conditions,
lack of moderate growth in the U.S. economy or even a slight recession in
2000; competitive pricing pressures; changes in Chlor Alkali's ECU prices from
expected levels; Chlor Alkali operating rates below current levels;
higher-than-expected raw material costs; higher- than-expected transportation
and/or logistics costs; a downturn in any of the markets Olin serves such as
electronics, automotive, ammunition and housing; the supply/demand balance for
Olin's products, including the impact of excess industry capacity; efficacy of
new technologies; changes in U.S. laws and regulations; failure to achieve
targeted cost reduction programs; capital expenditures, such as cost overruns,
in excess of those scheduled; environmental costs in excess of those
projected; and the occurrence of unexpected manufacturing
interruptions/outages.
