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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: March 27, 1998
SUN COMPANY, INC.
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(Exact name of registrant as specified in its charter)
Pennsylvania 1-6841 23-1743282
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(State or other (Commission (IRS employer
jurisdiction of file number) identification
incorporation) number)
Ten Penn Center, 1801 Market Street, Philadelphia, PA 19103-1699
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(Address of principal executive offices) (Zip Code)
(215) 977-3000
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(Registrant's telephone number, including area code)
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Item 5. Other Events.
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On March 27, 1998, Sun Company, Inc. issued a press release announcing
that it has signed a letter of intent to acquire AlliedSignal Inc.'s Phenol
Facility in Philadelphia and related working capital. A copy of such press
release is attached hereto as Exhibit 99.1. The purchase price for the
transaction will be approximately $185 million to be paid in installments
over four years.
Item 7. Financial Statements, Pro Forma Financial Information and
Exhibits.
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(c) Exhibits
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99.1 Sun Company, Inc. Press Release dated March 27, 1998.
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SIGNATURE
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.
SUN COMPANY, INC.
BY s/ THOMAS W. HOFMANN
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Thomas W. Hofmann
Comptroller
(Principal Accounting Officer)
DATE March 27, 1998
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EXHIBIT INDEX
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Exhibit
Number Exhibit
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99.1 Sun Company, Inc. Press Release dated March 27, 1998.
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EXHIBIT 99.1
Sun to Acquire AlliedSignal's Phenol
Facility in Philadelphia
Philadelphia, March 27, 1998 -- AlliedSignal Inc. and Sun Company,
Inc., today signed a letter of intent under which Sun will acquire
AlliedSignal's phenol plant, located in the Frankford area of Philadelphia,
and the plant's merchant customer base. The agreement preserves the phenol
supply position for AlliedSignal's downstream nylon businesses.
Completion of the sale is subject to the successful negotiation of a
definitive agreement and the completion of due diligence and regulatory and
board approvals. That process is expected to take three to four months.
Charles Valutas, vice president of Sun's Chemicals business, said the
acquisition is in line with Sun's strategic plan to expand its chemicals
business further downstream in the value chain. "We currently supply
approximately half of the plant's feedstock, cumene, from our Philadelphia
refinery, which is located just 10 miles away in South Philadelphia, and by
the third quarter of this year we will complete a project at the refinery
that will increase our cumene production there by 70 percent," he said.
"This acquisition is an excellent opportunity to move downstream in
chemicals by adding a first-class facility right in our own back yard."
"This deal makes good business sense for both companies," said Dave
Weidman, president of AlliedSignal Polymers. "Sun is more willing to
expand its merchant business and wants to invest in the facility.
Strategically, that helps our phenol cost position. We can also redirect
our capital to invest in high-growth areas where we add significant value
for our customers, such as Engineering Plastics, Specialty Films and
Performance Fibers." Weidman added that AlliedSignal will continue to
operate the plant as usual until the sale is completed.
The facility annually manufactures more than one billion pounds of
phenol, 620 million pounds of acetone and 70 million pounds of alpha-
methylstyrene, making it the largest producer of these basic chemicals in
North America and one of the two largest in the world. According to
Valutas, after the acquisition is completed, Sun intends to begin the first
phase of the plant expansion previously announced by AlliedSignal, which
will increase phenol production by approximately eight percent. He added
that Sun intends to offer employment to all employees of the business
working on the date of the closing. The business currently employs about
300 people.
Phenol is the main building block chemical in the production of nylon,
plywood resins and plastics such as those used in the manufacture of
compact discs. Acetone and alpha-methylstyrene are the raw material
chemicals for photographic film, printing inks, paints, varnishes and
adhesives.
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Sun Company, Inc. (NYSE: SUN), headquartered in Philadelphia, is one
of the largest independent petroleum refiner-marketers in the United States
with 1997 revenues of $10.5 billion. Sun operates five domestic refineries
with approximately 700,000 barrels per day of crude oil processing capacity
and markets gasoline under the Sunoco brand through approximately 3,800
Sunoco outlets in 17 states from Maine to Virginia and west to Indiana.
Sun sells lubricants and petrochemicals worldwide, operates domestic
pipelines and terminals, and manufactures metallurgical-grade coke for use
in the steel industry. For more information about Sun's Chemicals
business, please visit its web site at http://www.sunocochem.com.
With headquarters in Morristown, New Jersey, AlliedSignal Inc. (NYSE:
ALD) is an advanced technology and manufacturing company serving customers
worldwide with aerospace and automotive products, fibers, chemicals,
plastics and advanced materials. Sales in 1997 were $14.5 billion. For
more information about the company, please visit its web site at
http://www.alliedsignal.com.
NOTE: Those statements made in this release that are not historical facts
are forward-looking statements intended to be covered by the safe harbor
provisions of Section 27A of the Securities Act of 1933 and Section 21E of
the Securities Exchange Act of 1934. Although Sun and AlliedSignal believe
that the assumptions underlying these statements are reasonable, investors
are cautioned that such forward-looking statements are inherently uncertain
and necessarily involve risks that may affect the companies' business
prospects and performance, causing actual results to differ from those
discussed in the foregoing release. Such risks and uncertainties include,
by way of example and not of limitation: general business and economic
conditions; competitive products and pricing; fluctuations in supply of
feedstocks and demand for products manufactured; potential equipment
malfunction; the regulatory environment; and plant construction/repair
delays. These and other applicable risks and uncertainties have been
described more fully in Sun's 1997 10-K, filed with the Securities and
Exchange Commission on March 6, 1998, and in AlliedSignal's 1997 10-K,
filed with the Securities and Exchange Commission on Feb. 26, 1998.
For further information contact:
Sun: Bud Davis (media) 215-977-3485
Terry Delaney (investors) 215-977-6106
AlliedSignal: Will Rea (804) 520-3189
