US PVC manufacturer Axiall has accepted a sweetened takeover bid of US$3.8bn from rival Westlake Chemical, which includes Axiall’s debt and other liabilities.
The combination of the firms will create the second-largest PVC firm, after Shintech, and the third-largest chlor-alkali producer in the US, after Olin and Occidental Chemical. The combined company is expected to generate combined revenues of US$7.6bn.
Westlake said the merger will look to integrate Axiall’s employees and create a company with expanded manufacturing base and greater product diversity. It added Axiall’s ethylene business will be integrated into its chlor-vinyls operation.
Albert Chao, president and CEO at Westlake, said: “This transaction…creates a company with greater financial and operational flexibility and accelerates our growth strategy. We believe that after this transaction we will be better able to serve our customers with a more diversified portfolio that should create significant value and growth opportunities for Westlake stockholders.”
Westlake began the bidding process in January 2016 with an unsolicited offer of US$2.9bn, which Axiall rejected as “inadequate”. Westlake raised its offer to US$3.1bn in April and was rejected once more.
South Korea’s Lotte Chemical reportedly made a bid of US$2.6bn plus debt for Axiall on 6 June as the two companies are currently building a joint venture ethane-based ethylene plant in Lake Charles, Louisiana, US. Westlake said it would continue the joint venture project with Lotte once the transaction is complete.
The merger is expected to be complete by Q4.
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