Phelps Dodge completes sale of Columbian to Korean company

Phoenix, Arizona - Phelps Dodge Corp. has completed the sale of its subsidiary , Columbian Chemicals Co. to a company owned jointly by One Equity Partners LLC, a private equity affiliate of JPMorgan Chase & Co., and South Korean-based DC Chemical Co. Ltd.

Under the agreement, which was announced Nov. 16, 2005, Phelps Dodge received base purchase price proceeds of $543 million and approximately $100 million of Columbian's foreign-held cash. The agreement also includes a provision for post-closing adjustments. At closing, those adjustments, together with transaction expenses, were estimated to reduce net proceeds by approximately $43 million, for net proceeds of approximately $600 million upon final settlement.

The transaction resulted in special, net after-tax charges of approximately $65 million, resulting mostly from goodwill impairment charges, employee-related costs and tax benefits. Of that amount, approximately $43 million was recognised in the 2005 fourth quarter.

Columbian makes carbon black products used in rubber and industrial goods. It is one of the three largest carbon black makers in the world, with roughly 1100 tonnes of annual capacity for carbon black, about the same as Degussa AG. Cabot Corp has approximately 1800 tonnes' capacity and leads the world in terms of carbon black sales.

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Press release from Phelps Dodge