Eastman Chemical has announced that its board of directors has authorized management to pursue a plan that would result in the company becoming two independent, public companies.

KINGSPORT, Tenn.— Eastman Chemical Co., a leading manufacturer and marketer of chemicals, fibers and plastics, has announced that its board of directors has authorized management to pursue a plan that would result in the company becoming two independent, public companies.

The Specialty Chemicals and Plastics company would include Eastman’s presence in coatings, adhesives, inks, specialty polymers and plastics, and intermediates products. Eastman’s digital business ventures, including ShipChem, Inc., as well as the investment in Genencor International, would be part of this new entity.

The PET Plastics and Acetate Fibers company will be a world market- and cost-position leader in PET plastics and acetate fibers, and will also include Eastman’s polyethylene business.

Earnest W. Deavenport Jr., Eastman chairman and chief executive officer, said, “We plan to create two great companies. We believe that separating these businesses into two publicly traded companies will unlock long-term shareholder value and provide investors with investment opportunities in highly focused entities. Each company will set its own course for profitable growth, resource allocation and strategic transactions.”

Eastman intends to launch the two new companies through a spin-off in the form of a tax-free stock dividend, to be effective by the end of the fourth quarter 2001. Immediately after the spin-off, Eastman shareholders will own shares in both entities. Eastman has not yet finalized all aspects of the transaction, which remains subject to board approval and other customary conditions.

Deavenport will remain chairman and CEO of Eastman Chemical Co. until the spin-off is effective, and then will retire.

J. Brian Ferguson, who has been president of Eastman’s Polymers Group, will become CEO of the Specialty Plastics and Chemicals company. Allan R. Rothwell, who has been president of Eastman’s Chemicals Group, will become CEO of the PET Plastics and Acetate Fibers company.

Eastman expects its current leadership and board of directors will be divided between the two new companies. “We have strong talent and leadership within the company, and we will strengthen our capabilities from outside the company, where appropriate,” Deavenport said.

For further information, visit Eastman’s Web site at www.eastman.com.