A long chase pays off for Westlake
Maybe the long chase was worth it.
About a year after it closed its nearly $2.4 billion acquisition of rival chemical maker Axiall, Westlake Chemical Corp. of Houston reported blockbuster earnings in the third quarter. Westlake said it posted record profit and sales as the petrochemical company continues to expand.
The company’s profit more than tripled to $211 million from $66 million in the third quarter of 2016. Sales jumped more than 60 percent, to $2.1 billion from $1.3 billion.
Westlake’s vinyls business was particularly strong, accounting for $1.6 billion of sales. Westlake has performed well all year, seeing its stock surge more than 50 percent since the beginning of January to more than $90 a share at the end of last week.
Westlake chased Axiall for four years, attempting a hostile takeover until ultimately raising its price and negotiating a deal, agreeing to pay $2.3 billion in cash and assume $1.5 billion in Axiall’s debt. The final offer — $33 per share — boosted Westlake’s earlier bid by about 40 percent.
The deal closed in late August 2016.
The combined Westlake represents the world’s third-largest maker of both PVC, or polyvinyl chloride, and chlor-alkali, used to make chlorine and more. Westlake makes a variety of plastics and vinyls, while Axiall also made building products like siding, decking and window frames.
“We believe the acquisition and continued investments to improve the reliability and operational efficiency of our assets will enable us to be well positioned to fully leverage the improving vinyls market,” Westlake’s president and CEO Albert Chao said.
The chemical industry has undergone a wave of mergers over the past year or so, including the combination of Dow Chemical Co. and DuPont. email@example.com twitter.com/jdblum23