U.S.-based diversified chemical producer Eastman Chemical Co. has announced that it is acquiring U.S.-based specialty chemical maker Solutia Inc. for about $4.7 billion, including the assumption of Solutia's debt. Eastman intends to finance the transaction with a combination of debt, equity, and cash on hand. We believe the transaction, if consummated as currently structured, will result in a strong business risk profile and significant financial risk profile. We are affirming all our ratings on Eastman, including the 'BBB' corporate credit rating. The stable outlook on Eastman reflects our belief in the company's ability and intent to strengthen its financial profile to levels appropriate for the ratings within two years of closing. We are placing all our ratings on Solutia, including
