Westlake to acquire Axiall
Westlake Chemical Corp. and Axiall Corp. have come to an agreement that will create a combined company that will be the second-largest PVC producer and third-largest chlor-alkali producer in North America.
Under the terms announced June 10, Houston-based Westlake will acquire the outstanding shares of Atlanta-based Axiall for $33 per share in an all-cash transaction that has been unanimously approved by both boards of directors. The deal has an enterprise value of about $3.8 billion, including debt.
Westlake’s previous proposal, which was made March 29, had an aggregate value of $23.35 per share in cash and stock. Axiall had rebuffed that proposal, which had a total value of $3.1 billion including $1.5 billion of outstanding debt.
Axiall then announced June 8 that it was considering a takeover bid from Lotte Chemical Corp., which is based in Seoul, South Korea, and has an office in Houston. The two companies already are working on a joint venture to build a $1.9 billion ethylene feedstock complex in Lake Charles, La.
Two days later, Axiall and Westlake announced the new definitive agreement, to form a new company expected to have sales of $7.6 billion and $1.5 billion of earnings before interest, taxes, depreciation and amortization.
“This transaction aligns two remarkable companies, creates a company with greater financial and operational flexibility and accelerates our growth strategy,” Albert Chao, Westlake’s president and CEO, said in a news release.
Axiall President and CEO Timothy Mann Jr. said in the same release that the agreement provides its stockholders with immediate recognition for the long-term value of the company.
“We believe this strategic combination will drive significant value for our customers and business partners as we create a North American chlorovinyls leader with a highly integrated chain, diverse product portfolio and a globally competitive cost structure,” Mann said.