Westlake buys European resins maker for $667M

Westlake Chemical Corp. agreed to buy a German maker of polyvinyl chloride resins from Advent International Corp. for $667 million, ending a 14-year investment by the private equity company.

The purchase will be financed using existing cash and credit facilities, Houston-based Westlake said in a statement Wednesday. Closing of the deal is expected to take place in the third quarter. Vinnolit generated 917 million euros in revenue last year.

Overcapacity and high energy prices helped prolong Advent’s investment in the Ismaning, Germany-based company, which has six production sites, including one in the U.K. Advent in 2003 merged Vinnolit, once part of Celanese Corp., with its sister operation to save on costs and added a PVC paste business from Ineos Group in 2007.

“The acquisition of Vinnolit is an excellent strategic fit for Westlake,” Chief Executive Officer Albert Chao said in the statement. “It will allow us to expand our chlorvinyl business globally and adds important specialty PVC products and technology to our existing portfolio.”

Westlake, which has benefitted from cheap feedstock and energy supplies amid the shale boom in the U.S., is taking the opportunity to expand in an industry undergoing transformation. Its transaction coincides with additional PVC assets coming to market in Europe as Ineos and Solvay SA press ahead with a planned 4.3 billion-euro merger of their assets. The European Union agreed to that transaction on the condition that plants making suspension PVC and related assets are sold to remove overlaps.

Ineos will sell its S-PVC plants in Wilhelmshaven in Germany, Mazingarbe in France and Beek in the Netherlands with upstream chlorine and ethylenedichloride production facilities in Tessenderlo in Belgium and Runcorn in the U.K.