Nova Chemicals Corporation shareholders yesterday voted overwhelmingly in favour of Abu Dhabi-based International Petroleum Investment Corp's $500 million (Dh1.8 billion) takeover of the raw plastics manufacturer, which comes amid a downturn in the petrochemical industry.
Nova executives said they expect the transaction to close in late May or early June, pending Canadian and United States regulatory approvals. That would be more than a decade after the maker of ethylene, polyethylene and styrene became an independently traded company.
At a special meeting in Pittsburgh, Pennsylvania, 98 per cent of votes cast blessed the $6-per-share offer, announced in February as Nova struggled with debt and declining sales.
With the assumption of Nova's debt, the deal is worth $2.3bn.
Nova, which has plants in Canada, the United States and Europe, complements Ipic's own European, the Middle Eastern and Asian operations.
Shares in Nova had shed 95 per cent of their value in the year prior to Ipic's offer.
Nova President Chris Pappas, who will be the company's chief executive with long-time CEO Jeff Lipton retiring, said Ipic's financial strength will allow the company to prosper once conditions in the industry improve.
The sector is struggling due to the recession with weak demand for its products, which are used to make a wide array of goods from food packaging to building materials, while capacity additions come on line around the world.
"I have visited almost all of our key customers in the last couple of months and they are all pleased about Nova's future and what the Ipic transaction brings to Nova as a valued supplier," said Pappas.
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