Westlake Chemical to buy Axiall for $3.8bn
US-based manufacturer and supplier of petrochemicals, polymers, and building products Westlake Chemical has signed a definite agreement to buy Axiall for $3.8bn, including debt and other liabilities.
Approved by the board of directors of both companies, the deal is expected to be completed by Q4 of this year.
Westlake's president and chief executive officer Albert Chao said: "This transaction aligns two remarkable companies and 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."
Once completed, the merged entity will be the third largest chlor-alkali producer and the second largest PVC producer in North America. Following completion of the deal, Westlake anticipates annualised cost synergies of around $100m based on its estimates.
While subject to the approval of Axiall's stockholders and customary closing conditions, the deal aims to create a larger, more integrated, and diverse company.
The combination will allow ethylene integration into chlor-vinyls business; further downstream integration into PVC building products, which is expected to provide more operational certainty and growth opportunities; and expanded manufacturing presence, which is expected to improve future opportunities and global growth potential.
The deal also aims to create a combined balance sheet with expected investment grade metrics and flexibility to better capitalise on future investment opportunities.