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Westlake Chemical To Buy Axiall For $33/Share In All-Cash Transaction


Westlake Chemical Corporation (NYSE: WLK) and Axiall Corporation (NYSE: AXLL) revealed they reached a definitive agreement under which the former would buy all of the outstanding shares of the latter for $33.00 per share in an all-cash transaction. According to the company, this represented an enterprise value of about $3.8 billion, including debt and certain other Axiall liabilities.

Westlake and Axiall said the transaction was approved by the Boards of Directors of both companies unanimously and is expected to be completed by the fourth quarter of the current year.

The two companies indicated the integrated firm would be the third-biggest 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 companies added that the new combination creates a stronger firm with significantly increased scale, greater product diversity and integration throughout the value-chain.

Westlake indicated it expects the transaction to be accretive to its earnings in the first year following close and expects annualized cost synergies of about $100 million based on its estimates.

Its president and CEO, Albert Chao, 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. We have tremendous respect for Axiall's employees and look forward to working closely with them to achieve these goals."

Axiall's President and CEO, Timothy Mann, reacted to say, "We are pleased to have reached this agreement with Westlake, which provides our stockholders with immediate recognition of the long-term value of our company, underscoring our Board's commitment to maximizing stockholder value." He added, " We believe this strategic combination will drive significant value for our customers and business partners as we create a North American chlorovinyls leader with a highly integrated chain, diverse product portfolio and a globally competitive cost structure. We look forward to working closely with the Westlake team to ensure a smooth transition and complete the transaction as expeditiously as possible."


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