Mexico’s Mexichem buys PVC pipe producer Wavin for €531m

LONDON (ICIS)–Dutch polyvinyl chloride (PVC) pipe producer Wavin has agreed to a takeover bid from Mexichem for €531m ($708m), the two companies said on Wednesday.

PVC producer Mexichem intends to make a recommended all-cash public offer of €10.50 per ordinary Wavin share, which values 100% of the issued and outstanding shares at approximately €531m, the two companies said in a statement.  

In December 2011, Wavin said it rejected Mexichem’s bids of €9.00/share and €8.50/share, but allowed the company access to “due diligence information” after it raised its offer to €10.00/share.

“A combination between Mexichem and Wavin represents an important step for both of our companies in creating the leading global operator in the plastic pipe systems industry,” said the president of Mexichem’s executive committee, Ricardo Gutierrez Munoz.

“The geographic footprint and product portfolio of Wavin and Mexichem are highly complementary and together we will be exceptionally positioned to capitalise on growth opportunities,” he added.

The two companies said about two per cent of the issued and outstanding Wavin shares are held by Mexichem, which will finance the offer for the other, approximately 98%, of the issued and outstanding Wavin shares, around €520m, with cash on its balance sheet and existing committed credit facilities. 

“We believe Mexichem’s offer provides an opportunity for Wavin to join forces with a leading plastic pipe systems company whilst preserving our history, culture and assets such as our brand, our broad portfolio and our innovative power,” said Wavin CEO Henk ten Hove.

“We will be able to accelerate the Wavin 2015 strategy, to participate in the industry consolidation and to benefit from cross-selling, sourcing power and best-practice sharing. We look forward to a sustainable future together,” he added.

Mexichem and Wavin said the takeover creates a global market leader in plastic pipe systems with total annual sales of about €4bn.

Mexichem first made a bid for Wavin in November 2011.

($1 = €0.75)