Gulf Oil, which sells lubricants and industrial explosives in India and offshore, said it will make the acquisition through its U.K. subsidiary.
In the second biggest acquisition by an Indian company this year, Hinduja Group owned Gulf Oil Corporation on Wednesday announced acquisition of US-based speciality chemicals maker Houghton International Inc for $1.05 billion (about Rs. 5,670 crore).
Gulf Oil will buy 100 per cent stake in Houghton, whose chemicals and lubricants are used in the metalworking and automotive industries, from a US-based private equity fund, which was not named. New York-based private-equity firm AEA Investors LP had bought Houghton in 2007. An agreement was signed for the acquisition by its wholly-owned subsidiary in the UK on November 6 with the sellers, a US-based private equity fund.
Gulf Oil will make the acquisition through its UK subsidiary. The $1.045 billion deal is subject to certain conditions and Houghton will operate as a separate company, a company statement said here. This acquisition is second only to Indian Hotels Company's $1.86 billion offer last month to buy Hamilton, Bermuda-based Orient-Express Hotels Ltd. Houghton, a maker of fluids used for metal processing applications including cutting and stamping, has 12 manufacturing facilities in 10 countries and reported an operating profit of $132 million in the year to September 30 on sales of $858 million.
Gulf Oil said it will be able to offer Houghton's industrial clients a complete end-to-end range of lubricants following the acquisition. Houghton will give the company access to customers in more than 75 nations. Besides Indian Hotels, Rain Commodities reached an agreement this year to buy Belgium-based speciality chemicals group Ruetgers for $918 million. State-owned Oil and Natural Gas Corporation (ONGC) bought stake in a group of oil fields in Azerbaijan for about $1 billion.
Gulf Oil Corp Ltd will operate Houghton as a separate company and the rest of Gulf's operations will be able to leverage Houghton's extensive base of industrial customers to offer them a complete en-to-end range of lubricants, the statement said. ``The acquisition fits extremely well with Gulf's lubricant portfolio. Houghton has a very strong industrial portfolio, which perfectly complements Gulf's very strong presence in the automotive lubricant sector,’’ it added.