Huntsman to Buy CIBA Textile Unit

The Texas-based chemical maker is paying $253 million for a producer of textile chemicals and dyes.
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Huntsman (HUN) - Get Report announced Monday it has signed an agreement to acquire the global textile effects business of CIBA Specialty Chemicals (CSB) - Get Report for $253 million.

The Woodland, Tex. chemical maker said the CIBA unit makes chemicals and dyes that enhance textile performance and appearance. Based in Basel, Switzerland, the unit has about 4,200 employees and posted 2005 revenue of about $1 billion, or about 17% of CIBA's total.

Peter Huntsman, the CEO of the eponymous company, said the acquisition will be accretive immediately to his company's EPS and add about 30 cents a share to annual earnings by 2008.

This is Huntsman's second acquisition of a CIBA business. In 2003, Huntsman acquired Vantico Group S.A., which was formerly CIBA's Performance Polymers unit.

Huntsman expects to close the deal by the third quarter of this year.

The purchase price of $253 million will be reduced by about $57 million in assumed debt and unfunded pension and other post employment liabilities and $31 million in unspent restructuring costs, Huntsman said in a news release.

Huntsman shares ended Friday at $20.54, while CIBA finished the week at $32.11.