US Court Approves Solutia’s Acquisition of Flexsys

Approval has been granted for Solutia Inc.’s agreement to acquire chemical firm Akzo Nobel NV’s share in Flexsys as well as its Japanese Crystex business. The US Bankruptcy Court for the Southern District of New York granted its consent to the transaction on April 11. The court’s consent was required as Solutia is emerging from Chapter 11 bankruptcy, which it filed for in 2003.

Flexsys, headquartered in Brussels, is a 50/50 rubber chemicals joint venture between Akzo Nobel and Solutia, formed in 1995. According to Solutia, Flexsys reported 2005 sales of about US$600 million and employs more than 1,000 people worldwide. Crystex is a Flexsys product, but produced by a separate Japan-based entity.

In December Solutia agreed to buy Akzo Nobel’s stake in Flexsys and the Crystex business in Japan. These purchases are worth a total of $212.5 million, subject to adjustments and deductions, according to Solutia spokesman Dan Jenkins. He said the company is working to complete the transactions as soon as possible.

Jenkins added that the bankruptcy court has also approved Solutia’s plans to sell its water treatment phosphonates business, Dequest, to Thermphos Trading GmbH for $67 million in cash. The court had to approve bidding procedures and other aspects of the auction process. Solutia plans to continue to operate the Dequest facility to produce Dequest products exclusively for Thermphos at Solutia’s plant in Newport, Wales, under a lease and operating agreement.