Brenntag, the global market leader in chemical distribution based in Essen, Germany, has signed an agreement to enter into a 65-35 joint venture with Raj Petro Specialities Pvt Ltd.
Raj Petro Specialties, which is headquartered in Mumbai and Chennai, distributes its own private label petroleum-related products to diverse customer industries in India and other countries in Asia Pacific, as well as in Africa and the Middle East. The enterprise value of Raj Petro Specialties was estimated at EUR 92 million (USD 108.67 million).
Brenntag will gain a majority stake of 65%, with a first tranche to be closed in April 2018 and the remaining 35% after a period of five years, in which the business will be operated as a joint venture, with the possible extension of an additional 12 years.
“For Brenntag, the acquisition of Raj is a further step into the Indian chemical distribution market which is the seventh largest globally for chemicals and third largest for lubricants. Raj’s existing product portfolio and market presence, capability of its infrastructure and strategic locations make it a compelling investment target to expand our footprint not only in India but also in other Asian Pacific countries, in Africa and the Middle East,” said Steven Holland, CEO of Brenntag Group.
Raj’s product portfolio includes transformer oils, white oils, paraffin, petroleum jelly, process oils, waxes, and solvents as well as industrial and automotive lubes.
“Raj has the widest product portfolio among its national competitors and a strong market presence with its own blended brands. Its facilities are strategically placed at the West and Southeast of India, in proximity to major ports, offering blending and repackaging capabilities, as well as a strong application development team. The cooperation offers Brenntag diverse potential for synergies and future growth,” said Henri Nejade, a member of the Management Board of Brenntag Group and CEO of Brenntag Asia Pacific.
Amit Nanavati, director of Raj Petro, said that the company “will continue to market our product under the existing brand name.”
The business is expected to generate total sales of approximately EUR 180 million (USD) in the financial year 2017-18 ending March 31, 2018. Closing of the first tranche is expected on April 1, 2018, subject to contractually agreed closing conditions.