Fairlawn polymer company A. Schulman Inc. is being purchased by a plastics and refining company for $2.25 billion.

LyondellBasell Industries, a publicly traded company with $34.5 billion in revenue last year, said it has a definitive agreement to purchase A. Schulman Inc. for $42 a share using cash on hand.

The purchase should be a good deal for both A. Schulman shareholders and its employees, Schulman Chief Executive Officer Joseph Gingo said.

While Gingo said he expects there will be some job and plant consolidations, the new corporate owner plans to invest in and grow Schulman’s business.

“I’m very encouraged. I really am,” he said. “I’m glad it’s a good deal for our shareholders. I also think it’s a good deal for our people.”

The agreement, announced Thursday morning before the stock market opened, will create a $4.6 billion combined business inside the larger corporate parent.

At one point in recent history, A. Schulman, which makes plastic compounds, composites and powders, was on the prowl for “transformative” acquisitions, including a failed $855 million bid in 2013 for specialty chemicals company Ferro Corp.

It ran into unexpected rocky financial waters following its $800 million purchase in 2015 of Citadel Plastic Holdings; A. Schulman subsequently filed a lawsuit claiming it was a victim of fraud in the purchase. The company wrote off about $200 million of the purchase.

In 2016, A. Schulman’s board fired Bernie Rzepka as its chief executive officer following a surprising lower earnings outlook and replaced him with Gingo, then the board chairman and the company’s former CEO who was initially hired in 2008 after 40 years with Goodyear.

About a month after Rzepka left, Schulman announced it had hired advisory firm Citi to help it with a business plan review and to look at strategic options.

All of that led to rumblings that A. Schulman could be putting itself up for sale.

Last September, A. Schulman agreed to expand its board of directors by two members, giving the additional seats to representatives of two of its largest shareholders.

Up until the purchase agreement was signed, A. Schulman was looking at a number of options, including continuing to operate as a standalone company, Gingo said.

“We wanted to look at every option,” he said. The company had an active search for a new CEO to succeed him right up until the sale announcement, he said. (Gingo’s two-year CEO contract expires in August.)

LyondellBasell’s per-share purchase price of $42 is an 8.7 percent premium over A. Schulman’s closing stock price on Wednesday.

A. Schulman shares popped above the $42 offer in trading Thursday. Shares were up $4.10, or 10.6 percent, to $42.75 at market’s close, and reached a 52-week high of $43.35 earlier in the day. Shares are up 14.6 percent since Jan. 1 and are up 26.8 percent from a year ago.

The higher trading range could mean some investors think a higher bid for Schulman may come in. But the more likely reason is investors anticipate Schulman winning a major lawsuit tied to its troubled Citadel acquisition, with the money eventually to be redistributed to shareholders, an industry analyst said.

Thursday’s announcement also raises questions about what will happen with A. Schulman’s Fairlawn presence. The company signed a 20-year lease when it moved into new corporate headquarters off Ridgewood Road in Fairlawn in 2013; it also has other facilities in the Akron area. A. Schulman is one of Fairlawn’s top five taxpayers.

In a conference call Thursday morning with industry analysts, LyondellBasell’s chief executive officer did not offer specifics on what impact the acquisition may have on A. Schulman employees, facilities and its Fairlawn headquarters.

Fairlawn Mayor Bill Roth said he and city leaders want to meet with the new owners to talk about the company’s future in the community. A. Schulman has been in Fairlawn since the 1970s.

“We’ve been told that things will pretty much stay the way they are,” Roth said.

The mayor added that the city has had a positive relationship with Schulman. “Schulman has been a very good company and we hope to continue the relationship,” he said.

Industry analyst Michael Hocevar of Northcoast Research in Cleveland said he would not be surprised if there eventually are local job cuts. He noted that LyondellBasell anticipates $150 million in annual savings, or synergies, after the acquisition and he thinks that dollar figure is “huge.” A. Schulman seems like a good fit with LyondellBasell, he said.

Cost savings could come in form of plant closings, consolidating back office operations and other areas, Hocevar said.

“I wouldn’t be surprised if there are cuts in the Akron area. That’s just a guess on my part,” Hocevar said.

But Gingo said while there may be reductions in corporate overhead and possibly some plant closings, he does not think there will be major cutbacks.

“In my judgment, they are not going to be massive,” he said. There are not many areas where A. Schulman and LyondellBasell overlap in terms of product, he said.

“They are not competitors of ours,” Gingo said.

In addition, there should not be many overlapping jobs involving A. Schulman employees, Gingo said. A. Schulman has about 5,100 employees globally.

It does not make sense for company to pay $2.25 billion for another business to close a lot of plants and cut a lot of jobs, Gingo said.

“It probably creates a lot more developmental opportunities for our people,” said John Richardson, A. Schulman’s chief financial officer.

It’s likely that if A. Schulman had continued as an independent company, it would have experienced slow growth, perhaps coupled with job cuts, because of its significant debt levels and other financial matters related to its Citadel purchase, Gingo and Richardson said.

If the Citadel purchase had not turned out as it did, Gingo said it is his opinion that A. Schulman would be in a better position today.

Gingo said he had bittersweet feelings about the sale of the company because of his personal ties to A. Schulman.

LyondellBasell said it will assume all A. Schulman debt as part of the purchase. The company expects to close on the deal in the second half of the year, pending regulatory and other approvals.

LyondellBasell, which has its U.S. headquarters in Houston and other corporate offices in London and the Netherlands, describes itself as one of the largest plastics, chemicals and refining companies in the world. It has about 13,000 employees and is valued at about $43.4 billion, based on Thursday’s closing stock price of $109.97 per share.

Adding A. Schulman will help LyondellBasell create what it said is a “premier Advanced Polymer Solutions business with broad geographic reach, leading technologies and a diverse product portfolio.”

The two companies have complementary strengths, Bob Patel, chief executive officer of LyondellBasell, said in a conference call Thursday morning. His company’s $2.1 billion compounding business, with about 1,500 employees, is largely focused on the automotive market, while A. Schulman is in other industries.

He said LyondellBasell has been looking into buying A. Schulman for the last six months.

“It’s a business we thought of as a platform,” Patel said. “It makes us a great full-range compounding company.”

LyondellBasell said it expects to see $150 million in annual synergies in two years and that the purchase will add to the company’s earnings within a year of the deal closing.

“The acquisition of A. Schulman is a natural extension of our current platform. This combination will allow us to provide our customers with a wider range of innovative solutions while adding the ability to serve high-growth end markets beyond the automotive sector, such as packaging and consumer products, electronics and appliances, building and construction, and agriculture,” Patel said in a news release.

The transaction provides A. Schulman Inc. shareholders with a compelling, immediate cash premium, Gingo said in a statement.

“We are delighted to join forces with LyondellBasell, an industry leader we have admired for many years,” Gingo said. “The combined business will be better positioned to address a broader range of customer needs by integrating across applications and offering customers a wider range of solutions in attractive and growing markets. We also expect this combination to create significant opportunities for A. Schulman employees, whose professionalism and expertise will be integral to advancing LyondellBasell’s vision, values and commitment to making a positive global impact.”

Beacon Journal reporter Rick Armon contributed to this story. Reporter Jim Mackinnon covers business and county government. He can be reached at 330-996-3544 or jmackinnon@thebeaconjournal.com. Follow him @JimMackinnonABJ on Twitter or www.facebook.com/JimMackinnonABJ