Local workers may be affected in a deal with Superior Plus Corp which has acquired Canexus Chemicals for $324.1 million to expand its specialty chemicals portfolio.
The deal is said to benefit both companies and may affect workers at the Nanaimo plant near the Duke Point Terminal.
The merger of the two Calgary based chemical manufacturers will create a company with $4.1 billion a year in revenue but it may also include job cuts.
Superior Plus is best known in Canada for its Superior Propane outlets but it also makes specialty chemicals in Canada, the U.S. and Chile.
Canexus has been struggling with a debt load due to the sale of a train terminal sold for $75 million after sinking $360 million into the project northeast of Edmonton.
Canexus shareholders will get 0.153 of a Superior share. This works out to C$1.74 ($1.33) for each share, a premium of 47.5 percent to Canexus closing price a week ago Monday
The deal value has been calculated on Canexus’ 186.3 million shares outstanding at June-end.
A spokesperson for Canexus Calgary office or the Nanaimo plant was not available to comment.
Superior Plus said it had got C$650 million in financing and said it will refinance Canexus’ debt. Canexus had a total net debt of C$554.8 million as of June 30.
CIBC World Markets and The Valence Group acted as financial advisers to Canexus. National Bank Financial Markets and J.P. Morgan Securities LLC acted as financial advisers to Superior Plus.
Two-thirds of the Canexus shares must be voted in favour of the deal to proceed, with a meeting scheduled for December. The deal isn’t expected to be finalized until the first half of 2016.