Mexican plastic pipe maker Mexichem bids $580 mn for Dutch rival Wavin

Mexican plastic pipe maker Mexichem yesterday said that it has made an indicative non-binding proposal to buy its European rival Wavin N V, in a deal that would value the Dutch company at about €430 million ($580 million).

Mexichem, a leading plastic pipe maker Latin America has made a cash offer of €8.50 per share for all of Wavin's ordinary shares and the proposed deal, if materializes, would make it the world's biggest plastic pipe maker.

''The combination of Wavin and Mexichem leads to the creation of the global market leader in plastic pipe systems with total sales of around 4.01 billion euros and is well positioned for further growth in Europe and potential new markets," Mexichem said in a statement.

Mexichem, which has engaged Barclays Capital and Citigroup as its financial advisors and Allen & Overy as legal counsel, said that it has invited the supervisory board of Wavin to enter into discussions to evaluate a possible combination between the two companies.

Based near Mexico City, Mexichem is the biggest chemical company in Mexico and one of the largest in Latin America. The company operates in North, Central and South America, Europe and Asia and exports its products to more than 50 countries.

The company has more than 10,000 employees and had 2010 sales of more than $3 billion. The company expects to more than double its revenues to nearly $7 billion in the next four years mainly through acquisitions.