Compiled By Tim Stevens Looking to create more shareholder value from its portfolio of products, Eastman Chemical Co., Kingsport, Tenn., has decided to split into two separate companies. The move is designed to focus the activities of related businesses, allowing them to selectively participate in market growth, attain further cost leadership, and release hidden value, especially in the area of specialty chemicals. Considered a high-growth potential business, the new specialty chemicals and plastics business will have $3 billion in revenues, encompassing Eastman's coatings, inks, specialty polymers and plastics, and performance chemicals and intermediates. The PET Plastics (bottles and carpet) and Acetate Fibers business is comprised of two segments that have traditionally generated high cash-flow. Worth about $2 billion, this business should exhibit growth, but also remain financially strong throughout business cycles, according to the company. "We believe that separating these businesses into two publicly traded companies will unlock long-term shareholder value and provide investors with investment opportunities in highly focused entities," says Earnest W. Deavenport Jr., CEO. "Each company will set its own course for profitable growth, resource allocation and strategic transactions." The company intends to launch the two new companies through a spin-off in the form of a tax-free stock dividend, to be effective by the end of the fourth quarter 2001. Immediately after the spin-off, Eastman shareholders will own shares in both entities.