Westlake Chemical Corp., Houston, has completed its previously announced acquisition of Axiall Corp., Atlanta, to become the third-largest chloralkali producer and the second-largest polyvinyl chloride (PVC) producer in North America.
Westlake closed the deal on Aug. 31 with the purchase of all of Axiall’s outstanding shares for $33/share in an all-cash transaction, representing an enterprise value of about $3.8 billion, including debt and certain other Axiall liabilities, Westlake said.
Alongside becoming a leader in North American chloralkali and PVC production, the combined company also will become the largest low-density polyethylene (LDPE) producer in the Americas, with anticipated combined pro forma revenues of $7.4 billion and adjusted earnings before interest, taxes, depreciation, and amortization of $1.4 billion for the 12-month period ended June 30, Westlake said.
Part of Westlake’s growth strategy, the acquisition creates a company with greater financial and operational flexibility that will be better able serve its customers with a more varied product slate, which in turn should create more value and growth opportunities for stockholders, said Albert Chao, Westlake’s president and chief executive.
The completed merger follows the start of construction on a $3-billion grassroots petrochemical complex in southwest Louisiana by South Korea’s Lotte Chemical Corp. and LACC LLC, a subsidiary of Axiall and Lotte Chemical USA Corp.’s 50–50 joint venture Eagle US 2 LLC, which broke ground in mid-June (OGJ Online, June 14, 2016).
Under construction on the same property in Lake Charles, La., near Axiall’s existing manufacturing plants in Calcasieu Parish, LACC’s proposed $1.9-billion ethane cracker complex and Lotte’s associated $1.1 billion monoethylene glycol (MEG) plant intend to take advantage of access to competitive US shale feedstock resources as well as existing ethylene-distribution infrastructure (OGJ Online, June 9, 2016).
The 1-million tonne/year ethylene and 700,000-tpy MEG plants remain on schedule for startup in early 2019.
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