Exhibit 99.2
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[VULCAN MATERIALS LOGO]
October 12, 2004
FOR IMMEDIATE RELEASE
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Investor Contact: Mark Warren (205) 298-3220
Media Contact: David Donaldson (205) 298-3220
VULCAN TO SELL CHEMICALS BUSINESS
Birmingham, Alabama - Vulcan Materials Company (NYSE: VMC)
announced today that it has reached an agreement to sell the assets of its
chemicals business, known as Vulcan Chemicals, to Basic Chemical Company, LLC, a
subsidiary of Occidental Chemical Corporation. The consideration to be received
by Vulcan for the business consists of cash, contingent future payments under
two earnouts, and the assumption of certain liabilities by the purchaser. The
assets of Vulcan Chemicals consist of chloralkali plants in Wichita, Kansas,
Geismar, Louisiana and Port Edwards, Wisconsin. The sale also includes the
assets of Vulcan Chemicals' joint venture located in Geismar.
"Our focus is strategic growth in aggregates and related
businesses," said Vulcan's Chairman and Chief Executive Officer Donald M. James.
"Although the chloralkali business has been a valuable asset historically,
exiting Chemicals will allow us to devote all of our resources to our
construction materials business. Operating improvements in our chemical plants
over the past several quarters, combined with strong current and projected
demand for our products, have improved the outlook for the business. The two
earnouts will enable us to participate in the improving chloralkali pricing and
the promising future we see for our new HCC-240fa product.
"Our Chemicals Division employees are dedicated and experienced
people. They do a great job for us and we believe they will do a great job for
Occidental. We believe our chemicals business is more strategic at a company
where the focus is on chemicals."
The transaction, which has been structured as a purchase of
assets, involves an initial cash payment to Vulcan, contingent future payments,
and the transfer of certain liabilities to the purchaser. Cash received at
closing is estimated to be $214 million, subject to adjustment for changes in
the net working capital of the business. The initial payment will result in net
cash proceeds to Vulcan of approximately $155 million, after taxes, transaction
costs and the cost of acquiring the remainder of the joint venture. In addition
to the cash purchase price, Vulcan will also be entitled to receive cash
payments under two separate earnouts, subject to certain conditions. The first
earnout is based on ECU (electrochemical unit) and natural gas prices during the
five-year period following the closing. Payments under the second earnout will
be determined by the performance of Vulcan's hydrochlorocarbon product
HCC-240fa, through 2012. Based on the current outlook for ECU values, natural
gas prices and marketplace performance of HCC-240fa, Vulcan projects earnout
payments of approximately $145 million,
with a net present value of approximately $110 million, although there can be no
assurance as to the ultimate amount that will be received. Occidental will also
assume the ordinary business contracts of Vulcan Chemicals, as well as
environmental remediation obligations associated with Vulcan Chemicals' three
plant sites.
The initial earnings impact on Vulcan will be a non-cash charge
of approximately $0.70 per diluted share, reflecting the difference between the
book value of the assets being sold and the upfront cash proceeds, net of
transaction costs. Subsequently, proceeds from the earnouts will be recognized
as income when received.
Closing of the transaction is subject to customary regulatory
and other closing conditions.
Vulcan will host a conference call to discuss matters contained
in this press release today October 12 at 12:30 p.m. CDT. Investors and other
interested parties may access the teleconference live by calling (800) 510-9834
approximately 10 minutes before the scheduled start. The access code is
14095183. For international calls, dial (617) 614-3669. The conference call can
also be accessed via the Internet at vulcanmaterials.com.
The conference will be recorded and available for replay
approximately two hours after the call through October 19, 2004. In the U.S. and
Canada dial (888) 286-8010, and for international calls, dial (617) 801-6888.
The access code to hear the recording is 10346219.
Vulcan Materials Company, a member of the S&P 500 index, is the
nation's foremost producer of construction aggregates and a major producer of
other construction materials. For additional information about Vulcan, see
vulcanmaterials.com.
Certain matters discussed in this release contain
forward-looking statements that are subject to risks, assumptions and
uncertainties that could cause actual results to differ materially from those
projected. These risks, assumptions and uncertainties include, but are not
limited to, those associated with general business conditions including the
timing and amount of federal, state and local funding for infrastructure; the
highly competitive nature of the industries in which the Company operates;
pricing; weather and other natural phenomena; energy costs; costs of
hydrocarbon-based raw materials; increasing pension and healthcare costs; and
other risks, assumptions and uncertainties detailed from time to time in the
Company's SEC reports, including the report on Form 10-K for the year.