Mexichem SAB, the petrochemical producer controlled by billionaire Antonio del Valle, agreed to buy German chemical maker Vestolit GmbH from Strategic Value Partners LLC for 219 million euros ($293 million) in cash and assumed liabilities.
Vestolit is Europe’s only manufacturer of high-impact polyvinyl chloride for weather-resistant windows, and is Europe’s second-largest producer of paste PVC for floors, wallpapers, and underbody protection for cars, Mexichem said in a statement today. Marl, Germany-based Vestolit generates annual revenue of 477 million euros.
Mexichem, based in Tlalnepantla, Mexico, has acquired more than 15 companies since 2007 and is considering further ventures as the nation opens its energy industry to private investment for the first time since 1938.
“The acquisition of Vestolit is in keeping with our strategy of becoming a global, vertically integrated chemical company with a focus on high-end, specialized products,” Antonio Carrillo, chief executive office of Mexichem, said in the statement. “This transaction is an opportunity to expand our European footprint, enter a new market segment and acquire new technology.”
Mexichem rose 2.5 percent to 54.38 pesos at the close in Mexico City. The shares have gained 31 percent since reaching a two-year low on March 10.
Mexico is expected to approve legislation this week that would allow foreign companies to participate in the country’s energy sector, David Penchyna, head of the Senate energy committee, said today in an interview. If signed into law by President Enrique Pena Nieto, the measure will lead to as much as $50 billion in private investment annually by 2020, according to Gabriel Casillas, chief economist at Grupo Financiero Banorte SAB.
JPMorgan Chase & Co. acted as an adviser to Mexichem on the transaction, which is expected to close in the fourth quarter. Jefferies Group LLC advised SVP.
“We are pleased to have entered into this agreement with Mexichem, which we believe will be an excellent owner for Vestolit’s next phase of growth in a sector that is undergoing a period of rapid and exciting change in Europe,” said Victor Khosla, founder and chief investment officer at SVP, which has approximately $5 billion in assets under management.