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Beazer to Sell Chemical Unit of Koppers

July 05, 1988|From Reuters

LONDON — British construction giant Beazer PLC said Monday that it had reached an agreement to sell the chemical operations of Koppers Co. to a management-led group for $660 million as it had previously pledged to do.

Beazer bought the Pittsburgh-based company last month for $1.8 billion after a long, much-publicized struggle with Koppers.

Beazer at the time said it wanted to sell the chemical operations because they did not fit in with the construction group's overall strategy. The British firm came under heavy pressure to sell the unit to its managers in order to preserve jobs in the Pittsburgh area. Beazer gave the managers 45 days to come up with a buyout plan for the unit, which employs 4,000.

Beazer said it intends to keep Koppers' two other main operations, building materials and services businesses, which have annual revenue of about $1 billion. The operations are expected to expand Beazer's U.S. operations to 50% of its total business from 37% currently.

Koppers' chemicals business has annual revenue of about $600 million.

As a condition for the takeover, Beazer agreed to work with the city of Pittsburgh and the Allegheny County government to let the managers of Koppers' CAP chemicals operation buy the business. Beazer also agreed to keep Koppers' headquarters in Pittsburgh for at least three years.

The local governments, fearing heavy job losses in the area, had filed a lawsuit to block Beazer's proposed takeover of the company.

In its effort to fend off Beazer, Koppers had enlisted Pennsylvania politicians and residents in a campaign to save jobs in Pittsburgh, a town battered by the decline in the steel and manufacturing industries.

The campaign also highlighted the tensions resulting from the rise in hostile takeovers by foreign companies. BAT Industries PLC, the big British tobacco and retailing concern, is currently trying to acquire Farmers Group Inc., a large Los Angeles-based insurance company, for $4.5 billion in a similarly bitter struggle.

Beazer said the sale of the chemicals business is subject to the signing of a definitive purchase agreement, but added that both sides have agreed to complete the deal by Aug. 5.

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