Houston-based Westlake Chemical Corp. (NYSE: WLK) agreed to acquire Atlanta-based Axiall Corp. (NYSE: AXLL) for $33.00 per share in an all-cash deal valued at $3.8 billion, including debt.

The combined company will be the third-largest chlor-alkali producer and the second-largest PVC producer in North America, with expected combined revenues of $7.6 billion and EBITDA of $1.5 billion. Westlake expects the transaction to be accretive to its earnings in the first year following close and expects annualized cost synergies of approximately $100 million.

Multiple previous hostile takeover bids during the past six months and a rival offer from South Korea’s Lotte Chemical Corp. (KSE: 011170) were rejected by Axiall.

Westlake said it will work with Lotte Chemical on its current joint venture with Axiall, which is building an ethane-based ethylene plant in Lake Charles, Louisiana.

In February, Axiall agreed to sell its window and door profiles business to private equity firm OpenGate Capital. Axiall had also agreed to sell certain assets of its compound additives business, known as Solucor, and its manufacturing facility located in Bradford, Ontario, to Galata Chemicals of Southbury, Connecticut.

“This transaction aligns two remarkable companies, creates a company with greater financial and operational flexibility and accelerates our growth strategy,” said Albert Chao, Westlake’s president and CEO.

“We are pleased to have reached this agreement with Westlake, which provides our stockholders with immediate recognition of the long-term value of our company, underscoring our Board’s commitment to maximizing stockholder value,” said Timothy Mann, Jr., Axiall’s president and CEO.

The deal has been unanimously approved by the boards of directors of both companies and is expected to close by the fourth quarter of 2016, subject to the approval of Axiall’s stockholders and customary closing conditions. Westlake has received commitments from its banks to finance the transaction.

Deutsche Bank and Goldman, Sachs & Co. are acting as financial advisors and Cleary Gottlieb Steen & Hamilton LLP is acting as legal counsel to Westlake.

Morgan Stanley & Co. LLC and Barclays are acting as financial advisors and Jones Day is acting as legal counsel to Axiall. Weil, Gotshal & Manges LLP is acting as legal counsel to the Axiall board of directors.

Westlake Chemical Corp. is an international manufacturer and supplier of petrochemicals, polymers and building products with headquarters in Houston, Texas. Westlake’s range of products includes: ethylene, polyethylene, styrene, propylene, caustic, VCM, PVC suspension and specialty resins and PVC building products including pipe and specialty components, windows, fence, deck and film. The company was founded in 1986.

Axiall Corp. is a leading integrated chemicals and building products company. Headquartered in Atlanta, Georgia, Axiall has manufacturing facilities located throughout North America and Asia. The company was founded in 1984.

Facebooktwittergoogle_pluspinterestlinkedinmail

CONTACT US

Thank you for contacting ExitHub. We'll respond as soon as possible.

Sending

© 2018 ExitHub Inc. All Rights Reserved.

Log in with your credentials

or    

Forgot your details?

Create Account