AECI agrees to acquire agrochemicals firm Schirm from Imperial
Aeci Limited 5,5% Pref
R1,800.00
18:15 28/07/16
AECI announced on Wednesday that, via a wholly owned subsidiary, it had reached an agreement with Imperial Chemical Logistics (ICL) to acquire 100% of the issued share capital in Schirm, itself a subsidiary of ICL for a cash consideration of €110.5m.
Imperial, both a distributor of imported vehicles and an operator of a South African car rental agency, had sold off many of assets of late, including it insurance wing, as it sought to insulate itself from the volatile nature of the South African Rand.
As part of the deal ICL would remain in control of Schirm's warehousing, transportation and distribution services and explosives and speciality chemicals firm AECI would then pay €3.5m to Imperial in order to lease the warehouse capacity at its Wolfenbuettel, Germany site to meet Schirm's finished good storage requirements.
"The specialisation and capital requirements of chemical contract manufacturing are not aligned with Imperial Logistics’ capabilities and stated objective of reducing capital intensity," Imperial said in a statement.
"Moreover, there are limited operational or financial synergies between chemical contract manufacturing and Imperial Logistics' other operations," the firm added.
Imperial was said to be using the proceeds of the sale to reduce its short-term debt and to invest in the expansion of the group's core businesses.
As of 1750 GMT, shares had dropped 2.02% on the Johannesburg Stock Exchange to ZAC 10,170.00 each.