Eastman Chemical

(EMN) - Get Report

will split into two public companies, separating its specialty chemicals and plastics business from its PET plastics and acetate fibers division.

The transaction requires regulatory and board approval. Chairman and Chief Executive Earnest Deavenport will retire after the spinoff. J. Brian Ferguson, president of Eastman's polymers group, will become CEO of the specialty plastics and chemicals company, while Allan Rothwell, the president of the chemicals group, will head the PET plastics and acetate fibers company.

Eastman, which expects a one-time charge from the spinoff, said the creation of the two new companies will be effective by the end of the fourth quarter of 2001. Eastman shareholders will own stock in both entities.

In a separate statement this morning, Eastman Chemical, which is based in Kingsport, Tenn., said it plans to acquire the hydrocarbon resins business of specialty chemicals maker

Hercules

(HPC)

for an undisclosed sum. Eastman expects to close the acquisition by the end of the first quarter.

Shares of Eastman were lately up 99 cents, or 2.1%, to $48.33, while Hercules gained 37 cents, or 2.6%, to $14.50, both on the

New York Stock Exchange

.