Meeting set with Aristech workers

Published 12:00 am Monday, November 13, 2000

Sunoco Inc.

Monday, November 13, 2000

Sunoco Inc. officials will meet Tuesday with Aristech employees in Haverhill to keep them informed about changes following the sale of the chemical company.

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At the meetings, Sunoco will discuss its plans for future operations of the company, according to internal letters sent Thursday by Mitsubishi Corp. and Sunoco leaders.

Sunoco is prepared to discuss benefit programs it will have in place, the letters stated.

Sunoco Inc. officials said Thursday that the company has agreed to acquire Pittsburgh-based Aristech Chemical Corp. from the Japanese Mitsubishi Corp.

Included in the deal are Aristech plants in Haverhill; Neville Island, Pa.; Neal, W.Va; Pasadena, Texas, and LaPorte, Texas. The Ohio plant employs about 240 people, Sunoco spokesman Jerry Davis said.

The $695 million acquisition should not affect the plants, Davis said. He added that corporate structures will be consolidated, which could lead to some layoffs.

The stock sale, contingent on government approval, is scheduled to close Jan. 1.

The transaction took shape Monday when Mitsubishi’s board of directors met and passed a resolution to sell the company’s stockholding in subsidiary Aristech to Sunoco.

The decision was made as part of Mitsubishi Corporation’s ongoing MC2000 medium-term management plan, according to an Aristech press release.

Since the previous fiscal year, Mitsubishi Corporation has been actively working to raise the value of its assets, the release stated.

The sale of Aristech Chemical will trim Mitsubishi Corporation’s balance sheet and allow investment in higher yielding areas to raise the company’s earnings ability, it stated.

Mitsubishi said Aristech Chemical has been strategically positioned at the forefront of the corporation’s North American petrochemicals operations since its acquisition in 1990.

However, the petrochemicals industry has been undergoing a dramatic realignment, as evidenced by a string of large-scale mergers and acquisitions, the news release stated.

In this difficult operating environment, Aristech Chemical’s profitability of operations has declined due to industry overcapacity and the company’s inability to pass higher raw material prices resulting from rapidly rising crude oil prices onto customers.

Although a number of measures have been taken to halt this slide in earnings, Mitsubishi Corporation came to the conclusion that the best course of action was to sell Aristech Chemical to Sunoco rather than undertake a lengthy restructuring program on its own, the news release stated.

The company said it also believes that the sale would make its balance sheet even stronger and more productive.