Sterling Chemicals to be acquired by Eastman Chemical

Sterling Chemicals announced today that it has entered into a definitive merger agreement pursuant to which Eastman Chemical Company will acquire all of the outstanding equity of Sterling Chemicals for $100 million in cash, subject to certain adjustm

Sterling Chemicals announced today that it has entered into a definitive merger agreement pursuant to which Eastman Chemical Company will acquire all of the outstanding equity of Sterling Chemicals for $100 million in cash, subject to certain adjustments as provided in the merger agreement.

Under the terms of the transaction, the holders of Sterling Chemicals' common stock, par value $0.01 per share, will receive $2.50 per share in cash, representing a 63% premium over the most recently reported market price of $1.53 and a 94% premium over the 90 day volume-weighted average trading price (VWAP). Although, as of April 1, 2011, the aggregate Liquidation Value of Sterling Chemicals' outstanding shares of Series A Convertible Preferred Stock was $110,070,204, which aggregate Liquidation Value will increase to $114,473,006 on July 1, 2011, the holders of Sterling Chemicals' outstanding shares of Series

A Convertible Preferred Stock have agreed to support the transaction and will only receive $92,928,850 in the aggregate in respect of their Series A Convertible Preferred Stock, subject to adjustment as provided in the merger agreement.

The merger, which has been approved by the Sterling Chemical's board of directors upon the recommendation of a special committee of independent directors and by the board of directors of Eastman Chemical, is expected to close in the third quarter of 2011 after receipt of required regulatory approvals and the satisfaction of other customary closing conditions..

John V. Genova, Sterling's president and CEO, stated that, "We believe that we are an excellent strategic fit for Eastman, especially given our existing plasticizer manufacturing assets. The many other quality attributes of our Texas City site has the potential of adding further future value. We look forward to working with Eastman to ensure a smooth and effective transition."

In connection with the transaction, Moelis & Company LLC acted as exclusive financial advisor and Alston & Bird LLP acted as legal counsel to the special committee of the board of directors of Sterling Chemicals and Akin Gump Strauss Hauer & Feld LLP acted as legal counsel to Sterling Chemicals.

The transaction is subject to customary conditions, including applicable regulatory approvals. Investment Funds and other stockholders affiliated with Resurgence Asset Management, L.L.C., beneficially owning shares of Sterling Chemicals' common stock and Series A Convertible Preferred Stock having the right to cast over 88% of the outstanding votes eligible to be cast with respect to the adoption of the merger agreement have executed a written consent to adopt the merger agreement.