Huntsman to sell some assets

Salt Lake-based Huntsman Corp. has agreed to sell its U.S. based-chemicals and polymers business to Koch Industries Inc. for $456 million, completing an exit from commodity chemicals.

Flint Hills Resources LLC, a unit of Koch, also will pay about $286 million for inventory, Huntsman said Thursday in a statement. The deal includes olefin and polymer manufacturing assets in the Texas cities of Port Arthur, Odessa and Longview; Peru, Ill.; and Marysville, Mich. The businesses employ about 900.

Chief Executive Officer Peter Huntsman also shed commodity chemical assets in the United Kingdom to raise cash for debt payment and to focus on specialty products less exposed to wide swings in raw-material expenses. The company reported Thursday a fourth-quarter profit of $80 million after a year-earlier loss.

"We have transformed our business into one producing highly innovative products that serve an expanding global economy," CEO Huntsman, 43, said in the statement. "Our entire product line will now experience higher growth rates and much lower sensitivity to energy costs."

Koch, based in Wichita, Kan., is the biggest closely held U.S. company. The sale probably will close in the third quarter after the scheduled opening of Huntsman's Port Arthur olefins plant, which was damaged by fire in April, Huntsman said.

Shares of Huntsman, the fifth-largest U.S. chemicalmaker, fell 37 cents, or 1.8 percent, to close at $20.69 Thursday on the New York Stock Exchange. They have gained 9.1 percent this year.

The divested assets make ethylene, propylene, benzene and common plastics with 2005 sales of $2.5 billion and 2006 sales of $2.3 billion, spokesman Russell Stolle said. Adjusted for the Texas plant outage, sales would have been $2.9 billion last year, he said.

Net income in the fourth quarter on a per-share basis was 34 cents a share, Huntsman said. The net loss a year earlier was $65 million, or 29 cents a share. Sales fell 0.8 percent to $2.54 billion from $2.56 billion.

The company was forecast to earn 34 cents a share, the average estimate of eight analysts surveyed by Bloomberg. HSBC Securities analyst Hassan Ahmed said profit was below his 30-cent estimate when adjusted for a 27-cent tax benefit.

"They missed the number, but they got the sale completed," said Ahmed, who rates the shares "underweight."

Jefferies & Co. analyst Laurence Alexander said profit excluding discontinued operations and other items was 25 cents a share, 1 cent better than his estimate, largely because the tax benefit was 4 cents higher than he projected.