MOSCOW (MRC) -- Westlake Chemical Corp. will buy Axiall Corp. for about USD2.33 billion, the chemical companies said Friday, ending a monthslong takeover battle, said The Wall Street Journal.
Westlake Chemical will buy Axiall for USD33 a share, a 28% premium over Thursday’s USD25.81 close and sharply higher than Westlake’s price of USD9.60 on the day before the stock was boosted by news of the first merger offer.
In January, Axiall rejected a then USD20 cash-and-stock offer from Westlake, setting off a public back-and-forth takeover battle. Axiall had previously called Westlake’s bid "opportunistic and inadequate," while Westlake had tried to remove Axiall’s board via a proxy fight.
Earlier this week, South Korean conglomerate Lotte Chemical Corp. disclosed that it had submitted an unsolicited bid for Axiall, presumably providing the impetus for Westlake to work fast and seal the deal.
As part of the transaction, Westlake withdrew its bid to replace Axiall’s board.
Lotte and Axiall own a joint venture that is building an ethane-based ethylene plant in Louisiana. In the statement announcing the deal, Westlake said it "looks forward" to working with Lotte on the joint venture.
The transaction has been approved by the boards of both companies and is expected to close in the fourth quarter, pending regulatory approvals and Axiall stockholder approval.
Westlake produces petrochemicals, polymers and building products and is based in Houston. Axiall makes chlor-alkali, vinyls and building products and its headquarters is based in Atlanta.
Westlake shares rose 2.4% to USD46.13 and Axiall shares rose 26% to USD32.48.
Axiall is a chemical company formed in 2012 from the chemical assets of PPG and Georgia Gulf. The PPG products are primarily chlor-alkali. The combined companies will be the third largest producer of chlor-alkali in the US after Dow Chemical and Occidental. PPG will own 50.5% of the combined companies. The company is headquartered in Atlanta, GA.
Westlake Chemical Corporation is a U.S. manufacturer and supplier of petrochemicals and polymers, headquartered in Houston, Texas. The range of company's products includes ethylene, polyethylene, styrene, propylene, caustics, polyvinyl chloride and plastic products. Westlake is one of the major ethylene producers in the US and its Calvert City operation is a large integrated PVC site.
MRC