Westlake Chemical to buy Axiall, winning takeover battle

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

Unipetrol acquires petrochemical maker Spolana

MOSCOW (MRC) -- Unipetrol RPA, the Czech Republic based petrochemical company, has acquired Spolana, which manufactures chemical products such as PVC, caprolactam, industrial fertilisers, inorganic compounds, etc, for Euro 1 million, said Business Standard.

Acquisition of Spolana will enable the Unipetrol Group to better plan and optimise the production function, prepare for planned commissioning of the PE3 installation in the future and to make it more resilient to the external conditions.

Unipetrol Group consolidation project aiming at optimisation of the capital group structure has already included the companies like Benzina and Polymer Institute Brno. The main company of the Group remains Unipetrol RPA. The project is in line with the Unipetrol Group strategy and its goal is to better adjust the company to function in a highly demanding and very competitive market and open it to new business challenges.

"We see the acquisition of the Spolana company as a very important step for further improvement of management and coordination of our value chain, namely with regard to the utilisation of the steam cracker. Takeover of Spolana opens up additional possibilities to further strengthen and integrate Unipetrol’s position in the Czech Republic," said Marek Switajewski, CEO of Unipetrol.

Both companies are connected with the Litvinov-Neratovice piping system for product deliveries. Spolana is a major consumer of ethylene, as well as also purchases ammonia and sulphur from Unipetrol RPA.

As MRC informed earlier, Czech refiner Unipetrol reported a first-quarter net loss hurt by an outage at its Litvinov complex where it said the restart of a damaged steam cracker would have to be postponed by a month until August. The 25-million-crown (USD1.05 million) loss followed a 1.995 billion crown profit a year earlier as revenue fell 26 percent. Unipetrol said it expected to restart the steam cracker at Litvinov in August at 80 percent capacity and have it at full capacity in October. It was taken off line last August after a fire.

Unipetrol is 63%-owned by Poland’s state-controlled PKN Orlen petrochemicals and oil group.
MRC

Ufaorgsintez resumes PE and PP production

MOSCOW (MRC) -- Ufaorgsintez, part of Bashneft, began resuming production at polyethylene (PE) and polypropylene (PP) capacities after a scheduled turnaround, according to ICIS-MRC Price report.

The company's customers said Ufaorgsintez started the resumption process at its low density polyethylene (LDPE) and PP production capacities yesterday, on 14 June, after almost a two-week shutdown for maintenance. The first shipments are already planned for today.

As MRC informed previously, Ufaorgsintez shut down for maintenance its PP and some of LDPE production capacities on 2 June. The plant's total LDPE and PP capacity is 88,400 and 100,000 tonnes per year, respectively.

As MRC reported earlier, Ufaorgsintez"s Q1 net profit rose to Rb1.91 billion, up by 67% year on year. Revenues amounted to Rb7.58 billion, compared to Rb7.62 billion a year earlier. The cost of sales decreased by 8.4% to Rb5.51 billion. As a result, the company"s gross profit increased by 29% to Rb2.07 billion, operating profit rose by 31% to Rb1.55 billion, profit before taxes (EBIDTA) reached Rb2.44 billion.

According MRC's ScanPlast report, Ufaorgsintez produced 33,700 tonnes of LDPE and 40,900 tonnes of PP in the first four months of 2016, compared to 33,100 tonnes and 42,000 tonnes in the same period of 2015.

Ufaorgsintez PAO was founded in 1956 and is based in Ufa, Russia. Ufaorgsintez manufactures organic synthesis products in Russia and Europe. Its products include ethylene, propylene, ethanol, cumol, ethyl benzol, phenol, acetone, copolymer rubber, polyolefines, poly vinyl chloride and polyethylene items, thinners, and dilutants.
MRC

Jindal Poly Films extends completion date of BOPP capacity boost for Europe and US

MOSCOW (MRC) -- Jindal Poly Films Ltd., in its recent earnings conference call, said a new biaxially oriented polypropylene (BOPP) line at its sites in Brindisi, Italy, and LaGrange, Ga., will be complete by mid-2017, as per Apic-online.

The new lines, originally scheduled for completion by the fourth quarter of 2016, will each add 60,000 t/y of BOPP capacity at the sites. Jindal is also increasing metallizing and extrusion capabilities at the sites.

Also, the company said an additional BOPP line in India is complete and likely to be operational in the next two months, adding 41,000 t/y of capacity.

There are no plans to expand biaxially oriented polyethylene terephthalate (BOPET) capacity, Jindal noted.

As MRC wrote before, in 2012, Jindal Poly Films inked an agreement with ExxonMobil Chemical (ExxonMobil) to purchase ExxonMobil's BOPP Global Film business.

Jindal Poly Films is a part of Rs 3,000 crore B C Jindal Group, a 50 year old industrial group offering a wide range of products. The company is the largest manufacturer of BOPET and BOPP films in India. It produces BOPET film, BOPP film, metalized BOPET film and BOPP film, coated BOPET and BOPP films, polyester chips (for captive consumption in the BOPET film).
MRC

CGT Union strike suspended at Total's Donges, Feyzin refineries

MOSCOW (MRC) -- French CGT union workers have suspended their strike at Total's Donges and Feyzin refineries, but the strike at the company's Gonfreville refinery in Normandy will continue until Wednesday, two union officials told Reuters.

A union official at the 220-Mbpd Donges refinery said workers there voted on Friday to suspend the strike until June 14, and preparations to restart operations will commence on Friday evening. It could take up to a week for the refinery to be back to full output capacity.

Workers also voted to suspend the strike at the 117-Mbpd Feyzin refinery, but decided to extend the strike at the 247-Mbpd Gonfreville site until Wednesday.

Total said that preliminary moves to restart production at the three refineries were progressing, while work was continuing normally at five other petrochemical sites, including at its petrochemical plant in Carling in eastern France and at its naphtha chemical plant in the south.

It added that trucks were also loading refined products at all its refineries and fuel depots without hindrance from striking workers.

The three-week oil sector strike, part of a nationwide rolling protest against a planned government labor reform, led to a temporary production halt at refineries, blockades at oil ports, depots and terminals, and fuel supply disruption across France.

We remind that, as MRC informed previously, in December 2014, Total, Europe’s third-largest oil company, permanently shut its high density polyethylene (HDPE) line in Belgium. The plant was shut permanently owing to weak margins which have arisen on account of cheap imports in the region. Located at Antwerp in Belgium, the line has a production capacity of 70,000 mt/year.

Total S.A. is a French multinational oil and gas company and one of the six "Supermajor" oil companies in the world with business in Europe, the United States, the Middle East and Asia. The company's petrochemical products cover two main groups: base chemicals and the consumer polymers (polyethylene, polypropylene and polystyrene) that are derived from them
MRC