US chemical manufacturer Axiall acquired by Westlake Chemical for $3.8 billion, after its earlier bid was rejected
Texas-based petrochemicals manufacturer Westlake Chemical will purchase rival Axiall, headquartered in Georgia, for $3.8 billion (£2.7 billion). The all-cash transaction has been unanimously approved by both companies’ boards, and is expected to be completed by the end of 2016.
The combined company would be the third-largest chlor-alkali producer and the second-largest PVC producer in North America, according to Axiall, and the merger is expected to produce annual cost synergies of around $100 million.
Axiall rejected an earlier $3.1 billion bid from Westlake in April, citing significant problems in a presentation to shareholders. Subsequently, Lotte Chemical of South Korea – which has an ongoing joint venture with Axiall to build an ethane cracker in the US, slated to begin production in 2018 – had made a counter-offer, but Axiall ultimately accepted Westlake’s improved bid.
JPMorgan chemical industry analyst Jeffrey Zekauskas said in a briefing note that Westlake appeared to be ‘a serious bidder for Axiall’ based on acquisition efforts going back to 2012, when the firm was known as Georgia Gulf.