The M&A and Restructuring Committee of the Shenzhen exchange’s General Enterprise Market gave its approval Wednesday for Rianlon’s purchase of 92.2% of the stock shares of Kangtai. Rianlon, which is based in Tianjin, China, has agreed to pay ¥596 million (U.S. $92.2 million) for the additive maker – 30% in cash and the rest in stock shares. The committee’s approval was the final significant hurdle for an acquisition that Rianlon announced last December.

Kangtai, which is headquartered in Jinzhou, is one of the largest China-based lube additive suppliers, with sales of ¥445 million in 2020, according to the Beijing Commercial Daily. Kangtai operates a plant in Jinzhou with capacity to make 93,000 metric tons per year of lube additive components and packages, and it is building a second facility with capacity of 50,000 t/y.

Rianlon has been in the business of supplying antioxidants used in cosmetic anti-aging skin creams, but it noted that a factory that it is building in Zhuhai, China, will include units with capacity to make 20,000 t/y of antioxidant lube additives, bring the company’s combined lube additive capacity post acquisition to 163,000 t/y.

In a statement issued yesterday, Rianlon said it is eager to enter the lube additives market, citing forecasts that global demand for lube additive volume will increase by 8% between 2020 and 2023 and that the value of those materials will swell by 13%.

According to the Commercial Daily, a stock exchange filing by the company said the M&A and Restructuring Committee advised that the Kangtai plant now under construction faces a degree of risk because Kangtai has not obtained an energy conservation approval from the provincial government of Liaoning. Kangtai advised that it has applied for the energy conservation permit, that the application is pending and that the government has voiced its support for the project.