 "Westlake Chemical buys Axiall for $ 3.8 billion")
Westlake Chemical Corporation, the Texas (USA) based manufacturer of petrochemicals, polymers and building products, has acquired Axiall Corporation in an all-cash transaction that values Axiall approximately $ 3.8 billion, including debt and its certain other liabilities.
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 annualised cost synergies of approximately $ 100 million based on its estimates.
Albert Chao, president and chief executive officer, Westlake, commented, “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.”
Experts believe that ethylene integration into chlor-vinyls business better positions the combined company for margin capture and earnings stability. In addition, the combined entity is also expected to gain from further downstream integration into PVC building products, which is expected to provide additional operational certainty and growth opportunities.
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 annualised cost synergies of approximately $ 100 million based on its estimates.
Albert Chao, president and chief executive officer, Westlake, commented, “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.”
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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, Louisiana.
Experts believe that ethylene integration into chlor-vinyls business better positions the combined company for margin capture and earnings stability. In addition, the combined entity is also expected to gain from further downstream integration into PVC building products, which is expected to provide additional operational certainty and growth opportunities.