Statement re Acquisition
June 27 2012 - 9:01AM
UK Regulatory
TIDM87FZ
AECI LIMITED
Incorporated in the Republic of South Africa
(Registration No. 1924/002590/06)
Share code: AFE ISIN No. ZAE000000220
("AECI")
AECI ACQUIRES WATER TREATMENT BUSINESS IN AFRICA
AECI has acquired General Electric's world-class Chemical and Monitoring
Solutions business in Africa, for a total consideration of US$20 million. The
acquisition is effective from 1 July 2012 and will be merged into ImproChem,
which is leading the AECI Group's strategic growth thrust to become the
supplier of choice for specialty water treatment and process chemicals and
services in Africa.
The geographies covered by the transaction are Africa and the Indian Ocean
islands of Madagascar, Mauritius and Reunion. This target market has an
estimated combined annual value in excess of US$500 million and is growing at
12% a year. Excluded from the transaction are businesses in Egypt, Libya,
Tunisia, Algeria and Morocco.
ImproChem provides integrated water, energy and air solutions to the chemical,
refining, petrochemical, mining and food and beverage industries. It is has a
well-established footprint in Africa and the agreement with General Electric
(GE) will ensure that customers in this region, where water is often a scarce
resource, continue to have access to the most advanced technologies that
enhance the efficiencies of their operations while reducing operating costs.
AECI and GE have also entered into an exclusive distribution agreement and a
licensing arrangement that provide GE with continued direct involvement with
the business. As part of the agreement, ImproChem will produce chemical
products using GE formulations at its Umbogintwini plant. GE will also have the
right to consider forming a Joint Venture with ImproChem in the future. GE
remains committed to the CMS business, as demonstrated by its continued
investment in CMS research and development and in its CMS commercial sales and
distribution channels.
GE entered into a non-exclusive distribution arrangement with ImproChem in
October 2011. This new transaction builds on that solid foundation and both GE
and AECI believe that the new arrangement provides greater opportunities than
either company could offer alone. It is well aligned with both companies'
business models, both have a good reputation in the region and a well-regarded
compliance culture. GE also has an experienced team of sales people in the
field and strong regional capabilities that will complement ImproChem's
resources.
The transaction has been approved by the necessary regulatory authorities in
South Africa.
Woodmead, Sandton
27 June 2012
Sponsor: RAND MERCHANT BANK (A division of FirstRand Bank Limited)
END
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