Bloomberg News

Gulf Oil to Buy Chemical-Maker Houghton for $1.05 Billion

November 07, 2012

Gulf Oil Corp. (GULF), controlled by the billionaire Hinduja brothers, agreed to buy Houghton International Inc. for $1.05 billion in the second-biggest acquisition planned by an Indian company this year.

Gulf Oil agreed to buy Houghton, whose chemicals and lubricants are used in the metalworking and automotive industries, from a U.S.-based private-equity fund, the Hyderabad, India-based company said in an exchange filing today. New York-based private-equity firm AEA Investors LP bought Houghton in 2007.

Indian companies have announced international deals worth $10.2 billion in 2012, according to data compiled by Bloomberg. Gulf Oil’s planned acquisition is second only to Indian Hotels Co.’s $1.86 billion offer last month to buy Hamilton, Bermuda- based Orient-Express Hotels Ltd. (OEH:US)

Houghton, based in Valley Forge, Pennsylvania, posted sales of $858 million in the year ended Sept. 30, according to Gulf Oil. The Indian company may consider acquisitions to expand its lubricant-making capacity by at least 50,000 metric tons a year, President Ravi Chawla said last year.

Factories, Clients

Gulf Oil and its units had 2.2 billion rupees ($40.5 million) of cash and equivalents and 3.5 billion rupees of total debt as of March 31, according to data compiled by Bloomberg.

The company will be able to offer Houghton’s industrial clients “a complete end-to-end range of lubricants,” following the acquisition, it said in the statement. Houghton will give the company access to chemical factories in 10 countries and customers in more than 75 nations.

Gulf Oil fell 1.3 percent to 86.35 rupees at the close in Mumbai. The shares have gained 54 percent this year, compared with a 22 percent advance in the benchmark Sensitive Index. (SENSEX)

The Hinduja Group is a closely-held conglomerate that owns power plants and truckmakers and is controlled by brothers Gopichand and Srichand. It has operations in about 38 countries and gets as much as 9 percent of its revenue from India, Co- Chairman Gopichand Hinduja had said in an interview in January 2011.

The Hinduja brothers, based in London, were estimated to be worth $8 billion as of October 2012, according to the website of Forbes magazine.

The group, founded in 1914 by their father Parmanand, also has interests in the health care, media, real estate, finance and information technology industries, according to its website.

To contact the reporters on this story: Pratish Narayanan in Mumbai at pnarayanan9@bloomberg.net; Rakteem Katakey in New Delhi at rkatakey@bloomberg.net

To contact the editors responsible for this story: Jason Rogers at jrogers73@bloomberg.net; Alexander Kwiatkowski at akwiatkowsk2@bloomberg.net


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