The ratings reflect Kingsport, Tenn.-based Eastman Chemical Co.'s "strong" business risk profile as a diversified global chemical manufacturer and its "significant" financial risk profile (as our criteria define the terms) following its planned acquisition of Solutia Inc. This compares with our assessment of its business risk profile as "satisfactory" and its financial risk profile as "intermediate" prior to the transaction. On Jan. 27, 2012, Eastman announced that it has agreed to acquire Solutia for a total of about $4.7 billion, including assumed debt. The purchase price represents about 9x Solutia's last-12-month EBITDA, excluding expected cost and tax benefits. Eastman expects the transaction, which is subject to Solutia shareholder approval and customary closing conditions, to close by mid-2012. We believe that
