Kodak Co. To Spin Off Chemicals Subsidiary

ROCHESTER, N.Y. - Eastman Kodak Co. is to spin off its chemical unit today, creating the nation's 10th-largest chemical company.

Each shareholder will get one share of Eastman Chemical Co. common stock for every four Kodak shares held. Trading in the new company begins Tuesday on the New York Stock Exchange. Kodak won't retain any stake in Eastman Chemical.

The spinoff, announced in June, was the largest of three chemical spinoffs announced by U.S. companies this year and comes amid a three-year slump in the chemical industry.

It also was the first major restructuring move announced by Kodak. The company has since fired its chief executive and hired a new one, and announced plans to cut 10,000 jobs by the end of 1995 as it tries to revitalize itself.

Kodak will trim $2 billion of debt from its balance sheet as a result of the spinoff. It had $7.2 billion of debt at the end of 1992.

Eastman Chemical, the smallest of Kodak's four business units, was founded 73 years ago to provide chemicals for Kodak's photography business. It has since expanded to other products and other customers. Only 8 percent of its $3.9 billion in sales in 1992 was to Kodak.

The company, based in Kingsport, Tenn., will have an initial market capitalization of about $3.92 billion. Industry leader DuPont Co. has about $33 billion, followed by Dow Chemical Co. with $16 billion and Monsanto Co. with $8.8 billion.

In terms of sales, it will rank 10th nationwide and 34th worldwide.

"This is not a stepchild but a full-blown, major producer," said Paul Leming, a chemical industry analyst with Kidder, Peabody & Co. "Certainly it will emerge over time as one of the half dozen major chemical stocks analysts follow."