Union Carbide Corp. announced today that it will sell its agricultural products division, whose deadly pesticides killed 2,000 people in Bhopal, India, and were responsible for massive chemical leaks at Institute, W. Va.
The proposed sale, which involves plants in six states and three foreign countries, is the latest in a series of moves by Carbide aimed at raising enough cash to pay off billions of dollars in debts incurred last January during an acrimonious takeover battle.
A Carbide spokesman described the agricultural products division as the second-largest operation left in the company. The division has 4,000 employes, including 2,500 in the United States. Although the company gave no estimated sale price, one analyst estimated that the division would sell for between $500 million and $600 million. This division accounted for about one-third of Carbide's 1985 revenue of $9.5 billion.
The sale graphically illustrates the long-term repercussions of the big Wall Street takeover fights of recent years. As a result of its successful defense against corporate raider GAF Corp., Carbide's long-term debt more than doubled to top $5 billion. To meet these demands, Carbide has been forced to shrink in size.
In recent months, it has sold its Eveready battery products division to Ralston Purina Co. for $1.4 billion, its home and automotive products division to First Brands for $800 million and its film packaging division to Environdyne Industries of Chicago for $230 million.
"This is part of a major restructuring of the company," said Harvey Storch, an analyst with Derby Securities Inc. "They're getting down to the basics of what they want to be in for the long pull, and this agricultural products was only tangential."
The Bhopal plant, which has been closed since the methyl isocyanate (MIC) disaster, as well as other facilities of the firm's India subsidiary will not be part of the sale, the company said.
In a statement from corporate headquarters in Danbury, Conn., Carbide President Robert D. Kennedy said the decision to sell the division reflects changes in "strategic direction" of the company as well as the company's belief that the division has greater growth potential "if it is allied with another company with a strong commitment to agricultural products."
Kennedy also said Carbide officials plan to meet with potential buyers over the next few months. Although Carbide did not identify them, some analysts said that other major U.S. firms that manufacture pesticides, such as Dow Chemical Co., Monsanto Co. or E. I. du Pont de Nemours & Co. Inc., as well as European firms in the same business would be potential candidates.
The best-known U.S. facility to be put up for sale will be the Carbide plant at Institute, which has been the focus of national scrutiny ever since the Dec. 3, 1984, leak of MIC from a similar plant in Bhopal, India, killed about 2,000 people. The Institute plant was the only one in the United States that manufactured MIC and had an identical design.
Despite more than $5 million in safety improvements after Bhopal, Institute had a major chemical leak in August 1985. In addition, the Labor Department last April fined Carbide $1.38 million -- the largest in department history -- for 221 alleged health and safety violations at the Institute plant. The fine is now under appeal by the company and would not be affected by the sale.
Carbide spokesman Harvey Cobert said that only about half of the Institute plant is involved in the production of agricultural chemicals and would be affected by the sale, but that the plant would not be closed.
Other U.S. facilities that will be for sale are in Research Triangle Park in North Carolina; Woodbine, Ga.; Clinton, Iowa; St. Joseph and St. Louis, Mo.; and Ambler, Pa. In addition, facilities in Calgary, Canada; Bezier, France; and Cubatao, Brazil, will be on the block.