Exhibit 99
[Solutia Letterhead]
FOR IMMEDIATE RELEASE
- -------------------------------------------------------------------------------
Contacts: Financial - Liesl Livingston 314-674-7777
Media - Beth Rusert 314-674-8527
SOLUTIA ANNOUNCES AN AGREEMENT TO SELL ITS
RESINS, ADDITIVES AND ADHESIVES BUSINESSES
TO UCB FOR $500 MILLION
Compelling, strategic move for both companies
ST. LOUIS, Dec. 3, 2002 - Solutia Inc. (NYSE:SOI) today announced
that it has signed a definitive agreement to sell its resins, additives and
adhesives businesses to UCB S.A. for U.S. $500 million cash. In addition,
UCB has made an upfront payment of $10 million for a short period of
exclusivity. The sale is expected to close in early 2003, subject to
completion of normal regulatory approvals and other customary closing
conditions.
John C. Hunter, chairman, president and chief executive officer of
Solutia said, "This transaction is a strategic move for Solutia as it will
strengthen our balance sheet by allowing us to pay down a substantial amount
of debt. With a much improved debt structure, Solutia will have greater
flexibility to deal with future business risk and uncertainty, as well as
pursue certain strategic opportunities."
"Our strengthened financial situation will position Solutia to
focus more sharply on the growth and market penetration opportunities that
we are pursuing in our remaining businesses. The transformation taking place
at Solutia is consistent with our portfolio strategy: to expand and grow
performance films; to grow selected specialty products businesses; and to
maximize the value of integrated nylon. These actions will benefit our
shareholders, as well as our employees and our customers," Hunter stated.
Georges Jacobs, chairman of the executive committee of UCB, said,
"We are very pleased to welcome the resins, additives and adhesives
businesses into our portfolio of specialty chemicals for coatings business.
These businesses have played an important role in the development of
environmentally friendly resins. Their products include a variety of
water-borne resins, dozens of highly specialized Gelva(R) adhesive
formulations and additives products which are used in a broad range of
demanding applications in industries such as graphics and printing,
automotive, medical and solar films. The businesses have been solid
performers for Solutia, and we believe that they will be a remarkable fit
within UCB, leading to a world class business for Surface Specialties."
TRANSACTION DETAILS
The transaction is anticipated to be slightly cash accretive and 7
to 9 cents dilutive to earnings per share in 2003. Upon closing, a modest
accounting gain is expected. The company expects approximately $40 million
in cash interest savings in 2003.
The agreement includes 10 production sites that make liquid and
powder coatings, technical resins, additives products and pressure-sensitive
adhesives. The resins, additives and adhesives businesses together employ
approximately 1,700 individuals, in 22 countries and have sales of over $400
million for the nine months ended Sept. 30, 2002.
FACILITIES INVOLVED
Solutia will sell manufacturing facilities in: Wiesbaden,
Frankfurt-Fechenheim and Hamburg, Germany; Werndorf, Austria; Romano
d'Ezzelino, Italy; Dijon, France; Soborg, Denmark; La Llagosta, Spain;
Rayong, Thailand and Suzano, Brazil, as well as research and development
facilities in Graz, Austria, and Springfield, Mass.
Solutia will continue to manufacture Resimene(R) amino cross-
linking resins for UCB at the LaSalle, Canada, facility, and Indian Orchard
plant in Springfield, Mass., and Gelva(R) adhesives in Massachusetts. All
other manufacturing assets at the Indian Orchard facility will remain part
of Solutia. The sale does not include Solutia's industrial products
businesses or its Butvar(R) specials and dispersions and
Santotac(R) product lines.
EMPLOYEE INFORMATION
As part of today's agreement, current employees of the resins,
additives and adhesives businesses will transfer to UCB. At the La Salle,
Canada, and Springfield, Mass., locations, manufacturing employees will
remain Solutia employees and manufacture Resimene(R) resins and Gelva(R)
adhesives for UCB under operating agreements. In a limited number of areas,
Solutia and UCB have agreed to provide transition service agreements where
appropriate.
WEBCAST INFORMATION
John C. Hunter, will address a chemical industry investor
conference sponsored by Salomon Smith Barney in New York on Tuesday, Dec. 3,
2002, at 9:20 a.m. EST. Hunter's presentation will be webcast live on
Solutia's investor homepage at
http://www.solutia.com/pages/corporate/investors/investor_relations.asp
under "Presentations and Speeches." An audio replay of Hunter's speech will
be available on Solutia's website for five days following the presentation.
FORWARD LOOKING STATEMENT
This press release contains forward-looking statements regarding
Solutia's expected closing date for the transaction discussed above and the
impact the transaction is expected to have on Solutia. These statements are
based on current expectations, but actual results may differ materially,
depending on such important factors as ability to obtain timely regulatory
approvals and satisfy other closing conditions, success in managing changes
resulting from this transaction, and other factors identified in Solutia's
Annual Report on Form 10-K for the period ended Dec. 31, 2001 and Quarterly
Report on Form 10-Q for the period ended Sept. 30, 2002. These reports are
filed with the U.S. Securities and Exchange Commission and can be accessed
through Solutia's investor Internet site at www.Solutia.com.
Corporate Profiles
- ------------------
Solutia (http://www.Solutia.com) uses world-class skills in applied
chemistry to create value-added solutions for customers, whose products
improve the lives of consumers every day. Solutia is a world leader in
performance films for laminated safety glass and after-market applications;
resins and additives for high-value coatings; process development and
scale-up services for pharmaceutical fine chemicals; specialties such as
water treatment chemicals, heat transfer fluids and aviation hydraulic fluid
and an integrated family of nylon products including high-performance
polymers and fibers.
Solutia.... Solutions For A Better Life.
UCB (http://www.ucb-group.com), with headquarters in Brussels
(Belgium), is a pharmaceutical and specialty chemical company, which
operates on a global scale. It is committed to pharmaceuticals, as well as
to technically innovative products in surface applications. It employs
10,000 people around the world. The pharmaceutical research of UCB includes
the following fields: respiratory, including allergy and asthma, and
neurology. UCB Pharma's main products include Zyrtec (antiallergic), Keppra
(antiepileptic), Nootropil (cerebral function regulator) and Atarax
(tranquillizer).
-oOo-
Source: Solutia Inc.
St. Louis
Date 12/03/02