Westlake Chemical Corp. (Houston; www.westlake.com) and Axiall Corp. (Atlanta, Ga.; www.axiall.com) announced that they have entered into a definitive agreement under which Westlake will acquire all of the outstanding shares of Axiall for $33.00 per share in an all-cash transaction, representing an enterprise value of approximately $3.8 billion, including debt and certain other Axiall liabilities. The transaction has been unanimously approved by the Boards of Directors of both companies and is expected to be completed by the fourth quarter of 2016.
The combined company will be the third-largest chlor-alkali producer and the second-largest PVC producer in North America, with expected combined pro forma revenues of $7.6 billion and EBITDA of $1.5 billion for the last 12 months ended Q1 2016. The combination creates a stronger company with significantly increased scale, greater product diversity and integration throughout the value-chain. 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 based on its estimates.
Albert Chao, Westlake’s President and Chief Executive Officer, said, “This transaction aligns two remarkable companies, 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. We have tremendous respect for Axiall’s employees and look forward to working closely with them to achieve these goals.”
Westlake noted that, upon completion of the transaction, it looks forward to working with Lotte Chemical on its current joint venture with Axiall, LACC LLC, which is building an ethane-based ethylene plant in Lake Charles, La.
Axiall noted that the transaction is the culmination of its strategic review process to maximize stockholder value, which included the participation of multiple parties.
Timothy Mann, Jr., Axiall’s President and Chief Executive Officer, commented, “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. 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. We look forward to working closely with the Westlake team to ensure a smooth transition and complete the transaction as expeditiously as possible.”