Unocal Signs Final Papers on Sale of Chemical Unit

Los Angeles-based Unocal Corp. announced on Monday a “definitive agreement” to sell for $90 million most of its retail chemical distribution business to a subsidiary of a competitor, Ashland Oil Inc.

The sale is part of a strategy Unocal announced last April to restructure by focusing on other core operations.

The sale is scheduled to close Feb. 28, at which time Ashland will pay Unocal $85 million, with $5 million to come in future payments. Other terms were not disclosed.

The chemical unit being sold is based in Schaumburg, Ill., a suburb of Chicago, and has a nationwide network of distribution centers and 500 employees.

A Unocal spokesman, James H. Bray, said it is unclear whether any jobs will be affected by the sale.

“It’s undetermined right now what the job impact is,” Bray said.

An agreement in principle on the Unocal-Ashland sale was announced Nov. 8. Bray said the definitive agreement described Monday could not be consummated until regulatory approval, related to antitrust law, was granted by the Federal Trade Commission.

Unocal is the 13th-largest oil and gas producer based in the United States in terms of annual revenue. Ashland, based in Ashland, Ky., ranks 16th.

The distribution business that Unocal is selling specializes in a wide range of chemicals and hydrocarbon solvents--such as highly refined products that are used in oil-based paints, inks and resins.

Bray said the core businesses that Unocal seeks to focus chiefly upon include oil and gas exploration and production, and the manufacturing and marketing of natural-gas-based nitrogen fertilizers.

The spokesman said that Unocal also considers its carbon, graphite and agricultural units “still very much part of the core business.”

Unocal first announced its intention to sell the chemical distribution unit in April, 1991.