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Honeywell Agrees to Sell U.S. Nylon Carpet Fibers Business to Shaw Industries

Published on 2005-09-02. Author : SpecialChem

MORRIS TOWNSHIP, N.J. -- Honeywell (NYSE: HON - News) announced that it has agreed to sell its U.S. nylon carpet fibers business to Shaw Industries Group, Inc., a subsidiary of Berkshire Hathaway, Inc.

Honeywell and Shaw also agreed to a long-term supply agreement for Honeywell to supply Shaw with caprolactam and nylon resin, two intermediate chemicals used in the production of nylon fibers for carpeting and other applications.

Honeywell's Nylon business is comprised of two operations: fibers and intermediates. Honeywell will retain the intermediates business, which manufactures caprolactam, Aegis® nylon resins for various fiber and plastic applications, Sulf-N® ammonium sulfate fertilizer and other chemicals.

Financial terms of the agreement were not disclosed. The transaction, which is subject to Hart-Scott-Rodino regulatory review, is expected to close in the fourth quarter of 2005.

"Once completed, this divestiture will represent another major step in Specialty Materials' transformation," said Nance Dicciani, president and CEO of Honeywell Specialty Materials. "Divestiture of the non-core nylon carpet fiber business will allow us to focus on the future and our core growth portfolio, while building on our track record of financial achievement over the past three years."

Under terms of the transaction, Honeywell will sell its nylon fiber manufacturing operations in Anderson, Clemson and Columbia, S.C., to Shaw Industries, which will also acquire the Zeftron® nylon and Anso® nylon brand names. Shaw will also acquire Honeywell's 50 percent stake in Evergreen Nylon Recycling, based in Augusta, Ga.

These four operations represent approximately 90 percent of Honeywell's nylon fiber capacity. Honeywell's nylon fiber operations in Shanghai, China, and Arnprior, Canada, and its textile operations in Anderson, S.C., are not part of the transaction.

Honeywell's Nylon business was expected to post revenues of approximately $1.2 billion in 2005. After the divestiture and with the supply agreement, the remaining business is expected to have annual revenues of approximately $900 million.

Shaw Industries is based in Dalton, Ga., and produces and sells carpet, rugs, ceramic, hardwood, and laminate flooring for residential and commercial applications throughout the world.

Earlier this year, Honeywell sold its U.S. industrial wax operations to IGI International, Inc. and its Asian and European industrial wax operations to Paramelt BV. Last year, Honeywell divested its Performance Fibers business. The divestitures are part of Honeywell Specialty Materials' plan to focus investment on select core businesses built on growth platform technologies including fluorines, advanced fibers and composites, and electronic materials.

Honeywell International is a $26 billion diversified technology and manufacturing leader, serving customers worldwide with aerospace products and services; control technologies for buildings, homes and industry; automotive products; turbochargers; and specialty materials. Based in Morris Township, N.J., Honeywell's shares are traded on the New York, London, Chicago and Pacific Stock Exchanges. It is one of the 30 stocks that make up the Dow Jones Industrial Average and is also a component of the Standard & Poor's 500 Index.

Honeywell Specialty Materials, based in Morristown, N.J., is a global leader in providing customers with high-performance specialty materials, including fluorocarbons, specialty films and additives, advanced fibers and composites, customized research chemicals, and electronic materials and chemicals.

This release contains forward-looking statements as defined in Section 21E of the Securities Exchange Act of 1934, including statements about future business operations, financial performance and market conditions. Such forward-looking statements involve risks and uncertainties inherent in business forecasts as further described in our filings under the Securities Exchange Act.

Source: Honeywell

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