Westlake Chemical completed the Nakan acquisition
On January 2, Westlake Chemical (WLK) announced that it completed the Nakan acquisition. Westlake Chemical entered into an agreement with OpenGate Capital on September 25. In an all-cash deal, Westlake Chemical will pay $265 million for the acquisition. The acquisition will complement Westlake Chemical’s compounding business.
The acquisition will likely help Westlake Chemical increase its global presence in compounding solutions. The company will have facilities in France, Germany, China, Italy, Japan, Spain, Mexico, Vietnam, and the US. The acquisition is seen as a strategic fit for Westlake Chemical. The impact of the acquisition will likely be reflected in the first-quarter earnings.
Albert Chao, Westlake Chemical’s president and CEO, said, “NAKAN brings an impressive business with an outstanding reputation for meeting customer needs with superior technology, product quality, and operating excellence. We are pleased to welcome their talented team into the Westlake family of companies.”
Stock price update
Westlake Chemical stock bounced back after declining for a while. The stock gained 7.7% for the week and closed at $69.57. However, the stock is still trading 11.4% below its 100-day moving average price of $78.56. Westlake Chemical’s 100-day moving average has fallen from a peak of $112.40.
In 2018, Westlake Chemical declined 37.9%%, while Eastman Chemical (EMN), Celanese (CE), and LyondellBasell (LYB) declined 21.1%, 16%, and 24.6%, respectively. Westlake Chemical’s 14-day relative strength index of 57 indicates that the stock isn’t overbought or oversold.
Investors could hold Westlake Chemical indirectly by investing in the PowerShares DWA Basic Materials Momentum Portfolio ETF (PYZ). PYZ invests 1.9% of its portfolio in Westlake Chemical.