LyondellBasell is among the world’s largest producers of ethylene and propylene oxide. The Channelview complex is one of the largest petrochemical facilities along the U.S. Gulf Coast, covering an area of nearly 3,900 acres. CREDIT: LyondellBasell
Petrochemicals company LyondellBasell Industries NV will buy plastic composites maker A. Schulman Inc for $1.24 billion, doubling the size of its plastics business.
LyondellBasell will pay $42 per share, an 8.7 percent premium to Schulman's Wednesday close, the companies said on Thursday. Schulman's shares were trading at $42.15 before the opening bell.
The deal comes amid a wave of big mergers in the chemicals sector. Dow Chemical
and DuPont completed
their $130 billion merger last year to form DowDuPont, while ChemChina bought Swiss seeds group Syngenta for $43 billion.
Including A. Schulman's existing debt, the deal is valued at $2.25 billion, the companies said.
The combined company is expected to have $150 million in run-rate cost savings. The deal will add to earnings within the first full year after closure, the companies said.
J.P. Morgan and Dyal Co are LyondellBasell's financial advisers and Citigroup Global Markets is advising A. Schulman. (Reporting by Ahmed Farhatha