Westlake Chemical buying Axiall for $2.33 billion

Westlake Chemical Corp has reached a deal to buy chemical producer Axiall Corp for $2.33 billion after a six-month pursuit that included multiple bids and a rival offer from South Korea’s Lotte Chemical Corp. But sources close to the deal said Lotte has beat the offer by Westlake the board of Axiall had turned down in April.

Westlake’s initial bid of $20 per share in January was more than double Axiall’s share price of $9.60 at the time, and it pushed the offer up to $23.35 per share after Axiall’s initial refusal. The price represents a 18 percent discount to the Atlanta-based company’s 52-week intraday high.

Lotte Chemical shares fell 4.1 percent as of 10:38 a.m.in Seoul trading.

After Westlake said earlier this year it would try to replace nine of Axiall’s directors with its own nominees, the target company sought other suitors.

Axiall President and CEO Timothy Mann Jr. said in the same release that the agreement provides its stockholders with immediate recognition for the long-term value of the company. The chemicals arm of Lotte Group said in a regulatory filing on Tuesday that it has submitted an acquisition proposal to Axiall on Friday to widen its chemical portfolio and secure stable demand for the ethylene cracker it will start to produce in Louisiana in a partnership with Axiall.

Last year, Lotte Chemical announced a $3 billion project to build a chemicals plant in the US along with Axiall.

Westlake Chemical Corp. and Axiall Corp. have come to an agreement that will create a combined company that will be the second-largest PVC producer and third-largest chlor-alkali producer in North America. It expects to reduce annual costs in the combined company by $100 million.

Deutsche Bank and Goldman Sachs & Co are Westlake’s financial advisers for the deal and Cleary Gottlieb Steen & Hamilton LLP is its legal counsel.