Philadelphia, Pennsylvania-based Sunoco, Inc., a transportation fuels provider, Wednesday announced that its Board of Directors has authorized a plan to separate SunCoke Energy, a maker of metallurgical-grade coke for steel manufacturers in the US and Brazil, from the remainder of Sunoco as part of a strategy designed to unlock shareholder value.
The planned separation of SunCoke Energy from the remainder of Sunoco will create two businesses: a leading, high-quality metallurgical coke manufacturer with operations in the US and abroad; and a streamlined fuels business focused on refining, supply, logistics and retail marketing.
The company plans to effect the separation in the first half of 2011, subject to market, regulatory and other conditions, and is currently reviewing a variety of potential separation transactions, including a tax-free spin-off of SunCoke Energy to Sunoco shareholders. Credit Suisse is advising Sunoco in connection with the separation.
"The fuels and coke units are distinct businesses with different business models, different sets of customers and no significant integration or synergies," said Lynn L. Elsenhans, Chairman and CEO of the company. "SunCoke Energy is a leading independent coke producer in North America, and this business has attractive global growth potential. We believe that, through a separation from Sunoco and with a management team solely focused on pursuing opportunities, SunCoke Energy will be better positioned to serve its customers who are the world's leading steel manufacturers."