Honeywell has entered into a definitive agreement to acquire the 50 percent interest in UOP LLC currently owned by Union Carbide Corp., a wholly owned subsidiary of The Dow Chemical Company, giving Honeywell full ownership of the entity. The transaction, which is subject to regulatory approval, is expected to close in the fourth quarter of 2005. Honeywell will pay $825 million for Dow’s stake in UOP, with an adjustment for cash and outstanding debt in the venture at closing.
“UOP is an established technology supplier to the refining and petrochemical industries worldwide and is playing a key role in meeting the world’s increasing demand for energy,” said Honeywell Chairman and Chief Executive Officer Dave Cote. “The acquisition of UOP represents another significant transforming step for our Specialty Materials portfolio and is one more example of Honeywell’s commitment to investing in innovative and productive solutions that meet global needs.”
UOP is a leading international supplier and licensor of process technology, catalysts, process plants and consulting services to the petroleum refining, petrochemical and gas processing industries. UOP, which had 2004 annual revenues of $1.2 billion, will become part of Honeywell’s Specialty Materials portfolio of businesses.
“For more than 90 years, UOP has been recognized as a world leader in technology and innovation,” said Nance Dicciani, president and CEO of Honeywell Specialty Materials. “UOP is well positioned for growth as the world looks to enhance refining, petrochemical and natural gas capacities to meet increasing energy and feedstock demands. We are pleased to be adding such a great business to Honeywell Specialty Materials.”
UOP is headquartered in Des Plaines, IL and has approximately 3,000 employees worldwide and eight manufacturing facilities throughout Europe, Asia and North America. UOP’s technologies are mainly used in oil-derived products and chemicals, as well as the manufacture of plastics, detergents and fibers. UOP also produces catalysts, alumina adsorbents used to purify gas and molecular sieves used to dry air. Roughly half of the world’s biodegradable detergents are produced with UOP technologies.
The acquisition of UOP is part of Honeywell’s growth strategy for its Specialty Materials business. Over the past three years, Specialty Materials has focused on investment in select growth platform technologies, including fluorines, electronic materials and advanced fibers and composites. As part of this strategy, Specialty Materials has divested more than 10 non-core businesses, including a pending agreement to sell its U.S. nylon carpet fiber business. With the addition of UOP and the pending divestiture of the nylon fiber business, Honeywell expects Specialty Materials to have annual revenues of more than $4 billion in 2006.