UPDATE 3-Westlake Chemical wins Axiall pursuit with raised $2.33 bln bid

<articleLocation” > Westlake Chemical Corp has actually reached a deal to buy chemical manufacturer Axiall Corp for $2.33 billion after a six-month pursuit that consisted of numerous quotes and a rival offer from South Korea’s Lotte Chemical Corp. Atlanta-based Axiall shares gained 26 percent to close at $32.56 on Friday, a little below the new offer cost of $33 per share in money. Westlake shares increased 3 percent to $46.40. Axiall had actually earlier rebuffed Westlake, stating that the Houston-based petrochemical maker was attempting to acquire its vinyls assets inexpensive. Lotte Chemical said in a statement late on Friday in Seoul that it withdrew its bid. “Thinking about the hard scenario Lotte has dealt with in Korea recently and heated competition, we have actually decided to withdraw from the buyout competition,” it said. On Friday early morning, South Korean prosecutors raided the offices of the Lotte Group, the country’s fifth-largest corporation, and a number of affiliates in what three people with direct understanding of the matter stated belonged to an examination into a possible slush fund.

After its last $23.35 per share cash-and-stock offer in March was declined, Westlake installed its board nominees in an attempt to replace Axiall’s whole board. The offer has an enterprise value of about $3.8 billion, including financial obligation and other liabilities, Westlake said on Friday. The combined company will be North America’s third-largest manufacturer of chlor-alkali and the No. 2 manufacturer of polyvinyl chloride. Chlor-alkali is used making chlorine and caustic soda, while polyvinyl chloride is a kind of plastic used in a large range of items from pipelines to product packaging.

The acquisition will add to Westlake’s earnings from the very first year after it closes, the company said. The offer, which is anticipated to close in the fourth quarter, is seen saving about $100 million in expenses. The combined company is estimated to have proforma earnings of $7.6 billion for the 12 months that ended in the very first quarter. Lotte Chemical stated on Tuesday that it had made an offer for Axiall, but the business did not provide further information. The Seoul-based business already has a joint venture with Axiall, through which it plans to produce ethylene in the United States.

Westlake stated on Friday it was anticipating dealing with Lotte Chemical through the joint endeavor and that it had actually agreed to withdraw its candidates for Axiall’s board. Deutsche Bank and Goldman Sachs & & Co are Westlake’s financial advisors for the offer and Cleary Gottlieb Steen & & Hamilton LLP is its legal counsel. Morgan Stanley & & Co and Barclays are Axiall’s monetary advisors and Jones Day is its legal advisor. Weil, Gotshal & & Manges LLP is providing legal counsel to Axiall’s board. (Reporting by Amrutha Gayathri in Bengaluru; Extra reporting by Tony Munroe in Seoul; Modifying by Kirti Pandey and Muralikumar Anantharaman).

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