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Warner's Chemical Operations for $2.31 Billion

Time:2018-03-14 01:13Turbochargers information Click:

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Borg-Warner said it will have no trouble meeting the agreement with banks to repay their loans by the end of 1988. "It's a slam dunk," Donald Trauscht, chief financial officer, said in an interview Thursday.

The Borg-Warner chemical business, headquartered in Parkersburg, W. Va., had revenue of $1.25 billion in 1987. It is the worldwide leader in resins for a kind of plastic, ABS, that is widely used as a substitute for metal or glass.

"This acquisition is an important step in our worldwide materials strategy," Glen Hiner, senior vice president for GE Plastics, said in a news release.

Heymann said GE's plastics business has accounted for about 5% of sales and 12% of earnings. He predicted that in 1989, the expanded business would account for 10% to 12% of sales and 18% to 20% of earnings.

GE said it expects the purchase to add about 5 cents a share to its profit in 1989 after all acquisition costs are paid.

Borg-Warner's other businesses are automotive components, and information and protective services. The company's protective services includes armored cars, guards and alarm stations under the names of Wells Fargo, Burns Security and Pony Express. Auto components include transmissions, transmission components and four-wheel drive components.

Borg-Warner's leveraged buyout, led by Merrill Lynch Capital Partners, included the payment to shareholders of more than $4.1 billion in cash and slightly less than $300 million in "junk bonds," as well as the assumption of a little under $300 million in debt.

Merrill Lynch owns 51% of Borg-Warner's stock.

Among other asset sales, the company sold BWAC Inc., a finance unit, for $782.5 million to Transamerica Inc., and Chilton Corp., its credit-reporting subsidiary, to TRW Inc. for $360 million.

GE said it will also assume $35 million in Borg-Warner's long-term debt.

GE has been rapidly expanding its GE Plastics unit, which expects sales of nearly $3 billion this year. It invested $325 million for a new polycarbonate plant in Burkville, Ala., last year and will double the size of the plant by 1990 at a cost of $315 million.

In May, GE Silicones announced an agreement to combine with Union Carbide Corp.'s silicones business to form GE Carbide Silicones Inc., a joint venture with annual sales of about $750 million.

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