NEW YORK — Uniroyal Inc. said Wednesday that it has reached an agreement in principle to sell its Uniroyal Chemical subsidiary to Avery Inc. for $760 million in cash.
The companies said in a news release that the closing of the sale was subject to the arrangement of financing for the transaction and the execution of a definitive purchase agreement.
The transaction, which is subject to approval by the boards of both companies and the shareholders of Uniroyal, is expected to be completed by June 30.
Avery is a holding company that mines and processes bituminous steam coal through its Avery Coal subsidiary.
Triangle Industries, a major shareholder of Avery, has indicated that, as part of the financing for the transaction, it will make a "significant" purchase of Avery stock, according to the news release. No details of the proposed purchase were given.
Uniroyal announced last Nov. 8 that it would put its chemical subsidiary up for sale to help pay nearly $1 billion in debt incurred in a leveraged buyout of the parent company last September.
The chemical subsidiary produces agricultural chemicals, industrial chemical additives and specialized rubber and plastic products.
Uniroyal Chemical--minus its rubber plantation operations, which were not put up for sale--posted $570 million in sales during 1985, according to Uniroyal spokesman Yanis Biebelnieks.
Uniroyal, which is one of the world's largest rubber producers, was taken private by its management and the New York investment firm of Clayton Dubilier in order to prevent a hostile takeover by financier Carl C. Icahn.
In the buyout, which was approved by shareholders last September, Icahn agreed to accept a $5.9-million payment in return for dropping his $18-a-share bid.
The management group paid $22 a share, incurring nearly $1 billion in debt to take Uniroyal private.