$AXLL Surrenders to $WLK, Agrees to Be Acquired for $33

Instead of battling out a long proxy fight and other suitors, Axiall ceded to WLK and has agreed to be acquired for $33, in an all cash transaction. Previous to this, WLK was moving to remove the Axiall board and fuck everyone at the company. But now they’re all one big happy, insidious, chemical company, striving to provide the world with carcinogens.

The cos have entered into a definitive agreement under which Westlake will acquire all of the outstanding shares of Axiall for $33.00 per share in an all-cash transaction, representing an enterprise value of approximately $3.8 billion, including debt and certain other Axiall liabilities. The transaction has been unanimously approved by the Boards of Directors of both companies and is expected to be completed by the fourth quarter of 2016. 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. Westlake expects the transaction to be accretive to its earnings in the first year following close and expects annualized cost synergies of ~$100 million based on its estimates.

The transaction is subject to the approval of Axiall’s stockholders and customary closing conditions, including the expiration or termination of the applicable waiting period under the U.S. Hart-Scott-Rodino Antitrust Improvements Act. In conjunction with the merger agreement, Westlake has agreed to withdraw its nomination of a slate of director nominees at Axiall’s upcoming annual meeting of stockholders on June 17, 2016. Westlake has received commitments from its banks in connection with the financing of the transaction.

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, La.
Westlake will hold a conference call to discuss the transaction at 11am ET today.