AECI is acquiring German chemicals producer Schirm from Imperial for €110.5m (about R1.8bn), the JSE-listed companies said in separate statements on Wednesday morning.
AECI said the deal was part of its international expansion strategy, and Schirm would operate as a standalone entity in what the group calls its plant and animal health pillar.
Schirm operates four manufacturing plants in Germany — Schönebeck, Wolfenbüttel, Lübeck and Baar-Ebenhausen — and one in Ennis, in the US.
AECI said this complemented its well-established businesses in Africa, Southeast Asia, the US and Australia.
Agrochemicals — which include herbicides, fungicides and insecticides — account for about 80% of Schirm’s revenue. The balance comes from “fine chemicals”, which include raw materials sold to the personal and home care industries, AECI said.
Imperial said it had decided to sell Schirm because chemicals manufacturing was too capital intensive.
“The specialisation and capital requirements of chemical contract manufacturing are not aligned with Imperial Logistics’s capabilities and stated objective of reducing capital intensity,” Imperial said.
The initial deal excludes the warehouses and trucks that Schirm owns. Imperial will continue to handle logistics for Schirm following its takeover by AECI.
But the deal gives AECI an option to acquire four warehouse at Schirm’s Schönebeck site for up to €9m after a year.
Source: Business Day