Eastman Chemical Company’s ( EMN - Analyst Report ) impending purchase of Missouri-based chemical company Solutia Inc. ( ) has been cleared by the latter’s shareholders. This follows the approval of the deal by the European Commission in May 2012. Roughly 99% of the shareholders, who voted in a special meeting, approved the deal.

With all regulatory conditions have been met, the transaction now remains subject to the satisfaction or waiver of certain customary closing conditions. The acquisition is expected to consummate in the first week of July.

Eastman, in January 2012, landed a cash and stock deal worth $3.4 billion to acquire Solutia, a global leader in performance materials and specialty chemicals. The move is a part of the company’s expansion strategy. Per the agreement, Solutia stockholders will receive $22.00 in cash and 0.12 shares of Eastman common stock for each Solutia share.

Solutia registered around 30% of sales in 2011 from Asia-Pacific. Eastman believes that the takeover will help it to expand its foothold in China. The company envisions the transaction to immediately add to its earnings.

Annual cost synergies are expected to be roughly $100 million by 2013. Moreover, Eastman expects to realize significant tax benefits from the acquisition. It also recognizes the potential for meaningful revenue synergies by leveraging both companies’ technology and business capabilities and overlapping end-markets, particularly in automotive and architecture.

Eastman's diversified chemical portfolio, along with its integrated and diverse downstream businesses, is driving earnings. The company benefits from business restructuring and cost-cutting measures. It has sold unprofitable units and closed down the poorly performing ones.

Eastman expects the global economy to grow slowly while volatility in raw material and energy costs to subside in the near-term. The company expects earnings to be roughly $5.30 a share in 2012. It expects to benefit from the increased capacity additions as well as the Solutia acquisition.

Eastman, which competes with The Dow Chemical Company ( DOW - Analyst Report ) and E. I. du Pont de Nemours and Company ( DD - Analyst Report ) , holds a short-term Zacks #2 Rank (Buy). We currently have a long-term Outperform recommendation on the stock.