Westlake Chemical Corporation and Axiall Corporation today announced that they 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.  The combination creates a stronger company with significantly increased scale, greater product diversity and integration throughout the value-chain.  Westlake expects the transaction to be accretive to its earnings in the first year following close and expects annualized cost synergies of approximately $100 million based on its estimates.  

Albert Chao, Westlake's President and Chief Executive Officer, said, "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." 

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.

Axiall noted that the transaction is the culmination of its strategic review process to maximize stockholder value, which included the participation of multiple parties.

Timothy Mann, Jr., Axiall's President and Chief Executive Officer, commented, "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.  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."

The key strategic and financial benefits of the combination of Westlake and Axiall include:

• creation of a larger, more integrated and diverse company; 
• complementary geographic and product positions; 
• ethylene integration into chlor-vinyls business better positions the combined company for margin capture and earnings stability; 
• further downstream integration into PVC building products, which is expected to provide additional operational certainty and growth opportunities; 
• expanded manufacturing presence expected to enhance future opportunities and global growth potential; and 
• a strong combined balance sheet with expected investment grade metrics and flexibility to better capitalize on future investment opportunities.

Transaction Details

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, Westlakehas 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. 

Deutsche Bank and Goldman, Sachs & Co. are acting as financial advisors and Cleary Gottlieb Steen & Hamilton LLP is acting as legal counsel to Westlake. Morgan Stanley & Co. LLC and Barclays are acting as financial advisors and Jones Day is acting as legal counsel to Axiall. Weil, Gotshal & Manges LLP is acting as legal counsel to the Axiall board of directors.

Conference Call and Webcast

Westlake will hold a conference call to discuss the transaction at 11:00 a.m. Eastern Time on Friday, June 10, 2016. The public may access the conference call through a live audio webcast available on Westlake'sInvestor Relations page at http://westlake.com/investor-relations/ir-home-page-123.html. The conference call also can be accessed by dialing (866) 547-1509 or (920) 663-6208 for international callers. The access code is 31712145. Participants should dial in approximately 15 minutes before the call. Individuals who dial in will be asked to identify themselves and their affiliations.