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EXHIBIT 99.1
SUNOCO SIGNS AGREEMENT TO
ACQUIRE ARISTECH CHEMICAL
PHILADELPHIA, Nov. 9, 2000 -- Sunoco, Inc. today announced that it had signed
a definitive agreement to acquire Pittsburgh-based Aristech Chemical
Corporation. Included in the purchase are five Aristech chemical plants located
at Neal, WV, Haverhill, OH, Neville Island, PA, Pasadena and LaPorte, TX and a
state-of-the-art research center in Pittsburgh. These plants have the capacity
to produce 1.5 billion pounds per year of polypropylene, over 1.6 billion pounds
per year of phenol and related derivatives, including bisphenol-A, and 800
million pounds per year of plasticizers, and employ 1,100 people. Completion of
the transaction is subject to regulatory review.
Under the terms of the agreement, Sunoco will acquire the stock of Aristech
from Mitsubishi Corporation. The purchase price is $695 million, including
approximately $115 million for working capital. Contingency payments up to a net
present value of $167 million may also be made if realized margins for
polypropylene and phenol exceed certain agreed upon thresholds.
"We believe the acquisition of Aristech Chemical will provide enhanced
earnings power for our company and will be a platform for expansion in product
lines having high demand growth and with less capital intensity than traditional
refining," said Sunoco Chairman and Chief Executive Officer John G. Drosdick.
"While margins in chemicals have recently been low due, in part, to rising
hydrocarbon raw material prices, the acquisition is anticipated to be
significantly accretive to earnings and cash flow as the chemical industry moves
to mid-cycle performance over the course of the next few years.
"The polypropylene and phenol businesses integrate well with our existing
chemical operations and are a significant step in further upgrading Sunoco's
portfolio of businesses. We will be acquiring excellent facilities that have
been recently expanded and modernized by Aristech and we expect to realize
synergies quickly within Sunoco Chemicals through the integration of marketing,
distribution, feedstocks, and corporate services.
"Concurrent with this acquisition, Bruce G. Fischer has been appointed Vice
President of Sunoco Chemicals," Drosdick said. "Bruce has been a key player in
Sunoco's efforts in acquiring Aristech and has had extensive experience in the
chemical business." Most recently Fischer was Vice President and General Manager
of Sunoco's MidAmerica Marketing and Refining business unit.
Phenol is a raw material for the production of resins used in adhesives
primarily in the construction industry. Phenol is also a raw material for
bisphenol-A used to make rapidly growing polycarbonate resins for compact discs
and high impact automobile parts. Polypropylene is among the fastest growing
thermoplastics used in a wide variety of applications, including fibers,
injection molded plastics, and films.
Lehman Brothers acted as Sunoco's exclusive financial advisor in this
transaction.
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Sunoco will conduct a teleconference call at 8:30 a.m. EST Friday, November
10, 2000, to discuss the transaction. You can listen to the live conference call
by logging on to Sunoco's web site at www.SunocoInc.com. It is suggested that
you visit the site prior to the call to ensure that you have downloaded any
necessary software. The event will be archived and available for replay
beginning approximately one hour after its conclusion.
Sunoco, Inc. (NYSE: SUN), headquartered in Philadelphia, is one of the largest
independent petroleum refiner-marketers in the United States. Sunoco operates
five domestic refineries with 730,000 barrels-a-day of crude oil processing
capacity and markets gasoline through more than 3,500 Sunoco retail outlets in
17 states from Maine to Virginia and west to Indiana. Sunoco sells lubricants
and petrochemicals worldwide, operates domestic pipelines and terminals, and
manufactures metallurgical-grade coke for use in the steel industry. For
additional information, visit Sunoco's web site at www.SunocoInc.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 Sunoco believes 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 Sunoco's 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; changes in refining
and other product margins; fluctuations in supply of feedstocks and demand for
products manufactured; changes in operating conditions and costs; changes in the
level of environmental remediation spending; potential equipment malfunction;
potential labor relations problems; the legislative and regulatory environment;
and plant construction/repair delays. These and other applicable risks and
uncertainties have been described more fully in Sunoco's third quarter 2000 Form
10-Q filed with the Securities and Exchange Commission on November 3, 2000.
Sunoco undertakes no obligation to update any forward-looking statements in this
release, whether as a result of new information or future events.
For further information contact:
Jerry Davis (media) 215-977-6298
Terry Delaney (investors) 215-977-6106
