In a move long anticipated by industry watchers, Eastman Kodak Company announced yesterday that it will become the sole owner of Kodak Polychrome Graphics (KPG) through redemption of Sun Chemical Corporation's 50 percent interest in the joint venture. Kodak and Sun Chemical each own half of KPG currently, a joint venture established in 1998 with an original ten-year term. The transaction is expected to close in April 2005, and Kodak expects the acquisition to be accretive in 2005. Kodak indicates that KPG CEO Jeff Jacobson and his team will remain intact.

Under the terms of the transaction, Kodak will redeem all of Sun Chemical's shares in KPG by providing $317 million in cash at closing, $200 million in cash in the third quarter of 2006 and $50 million in cash annually from 2008 through 2013, for a total of $817 million. Kodak will fund the redemption through internally generated cash flow.

According to Barbara Pellow, Chief Marketing Officer for Kodak’s Graphic Communications Group, “Kodak clearly understands the need to have the best distribution in the industry, and the acquisition of KPG will substantially enhance our go-to-market strategy across all product lines. It opens the door to global distribution based on resources they have in field.”