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Mexichem acquires PVC producer Vestolit for €219 million
12:03 PM MDT | August 8, 2014 | Francinia Protti-Alvarez
Mexichem (Tlalnepantla, Mexico) has agreed to acquire Vestolit (Marl, Germany), Europe’s sixth-largest manufacturer of polyvinyl chloride (PVC), from private equity firm Strategic Value Partners (Greenwich, CT) for a total of €219 million ($294 million) in cash and assumed liabilities. The deal supports Mexichem’s strategy to expand worldwide in high-end specialty products, Mexichem says. The deal is subject to regulatory approvals and is expected to close in the fourth quarter. Mexichem plans to consolidate Vestolit under Mexichem's chlorvinyls chain for accounting purposes.
“This transaction is an opportunity to expand our European footprint, enter a new market segment, and acquire new technology and best practices for our global chlorvinyls chain,” says Antonio Carrillo, CEO of Mexichem.
Vestolit is Europe’s only manufacturer of high-impact suspension PVC for weather-resistant windows and is Europe’s second-largest producer of paste PVC for floors and wallpapers. Total installed PVC capacity is 415,000 m.t./year. The company also produces alkyl-chlorides, a value-added intermediary used for a variety of chemical and industrial applications. Vestolit will continue to operate under its current management with its existing brand portfolio once the deal is completed, Mexichem says.
This acquisition is not Mexichem's first in Europe's PVC sector. The company announced the €531-million acquisition of PVC pipe manufacturer Wavin (Zwolle, Netherlands) in February 2012 and obtained clearance from the European Commission in June that same year, as reported by CW. Mexichem also acquired PolyOne's PVC assets in a $250-million deal last year as it sought to broaden its footprint in the chlorvinyls market.
Further M&A activity is expected in Europe's PVC market. The European Commission earlier this year approved the merger of Ineos's and Solvay's PVC assets, subject to Ineos divesting suspension PVC assets in France, Germany, and the Netherlands; ethylene dichloride plants in Belgium and the United Kingdom; and vinyl chloride monomer and chlor-alkali units in Belgium.