A subsidiary of specialty chemicals distributor Azelis will acquire 90% of the shares of South Africa-based lubricants, lubricant additives and base oil distributor Umongo – majority owned by Omnia Group – for 1 billion South African rand (U.S. $68 million), Omnia said in an Oct. 21 South African stock exchange announcement.
“The transaction reinforces Azelis’ lateral value chain by expanding its product offering for the lubricants and metalworking fluid end markets,” Azelis said in an Oct. 21 news release. The acquisition also strengthens Azelis’ foothold in industry specialty chemicals in South Africa and the rest of the region, the company added.
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Umongo was no longer core to Omnia’s strategy and offered limited synergistic benefits to the group, while the price offered by Azelis’ subsidiary, Orkila South Africa Proprietary Ltd., was attractive, Omnia said in its announcement on South Africa’s JSE stock exchange. The company noted it had not marketed its stake in Umongo actively. The transaction is expected to close in the fourth quarter, subject to closing conditions.
The Omnia subsidiary Omnia Group Proprietary Ltd. acquired a 90% shareholding in Umongo in 2017. The remaining 10% of Umongo was owned by Autumn Storm Investments 294 Proprietary Ltd. After the transaction, Azelis’ Orkila subsidiary will hold 90% of Umongo’s issued share capital, Omnia will retain 9% and Autumn Storm 1%.
“Umongo supplies lubricant additives, base oils, process oils and chemicals as well as technical solutions to lubricant blend manufacturers in sub-Saharan Africa,” Omnia stated in its stock exchange announcement, noting that Umongo is the sole distributor for Chevron Products’ base oils and Chevron Oronite’s additives in South Africa and several other African countries.
Established in 2005, Umongo is a major supplier and service provider to the lubricant industry across Sub-Saharan Africa, providing technical support and solutions through their application laboratory. Headquartered in Durban, South Africa, Umongo’s 35 employees serve a variety of customers, including smaller companies, large multinationals and strong local players. Boston Moonsamy, CEO of Umongo, will remain with the company and continue to lead the business.