| Thu 28 Jun 2012, 8:00 | | AFE - AECI Limited - AECI acquires water treatment business in Africa |
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AFE
AFE
AFE - AECI Limited - AECI acquires water treatment business in Africa
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 entered into an agreement with General Electric ("GE") to acquire
its world-class Chemical and Monitoring Solutions business in Africa, for a
total consideration of US$20 million ("the Acquisition"). 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 Acquisition are Africa (excluding Algeria,
Egypt, Libya, Morocco and Tunisia) and the Indian Ocean islands of
Madagascar, Mauritius, Reunion, Rodrigues and the Seychelles. The market in
these areas is growing strongly. The Acquisition components outside of
South Africa are subject to approval by the South African Reserve Bank.
ImproChem provides integrated water, energy and air solutions to the
chemical, refining, petrochemical, mining and food and beverage industries.
It already has a well-established footprint in Africa and the agreement
with GE will ensure that customers covered by the Acquisition, 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.
GE had entered into a non-exclusive distribution arrangement with ImproChem
in October 2011. In addition to the Acquisition, AECI and GE have now 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 Acquisition 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.
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. In addition, GE has an
experienced team of sales people in the field and strong regional
capabilities that will complement ImproChem`s resources.
The Acquisition has been approved by the Competition Commission in South
Africa.
Woodmead, Sandton
28 June 2012
Merchant bank and sponsor
RAND MERCHANT BANK (A division of FirstRand Bank Limited)
Date: 28/06/2012 08:00:01 Produced by the JSE SENS Department.
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