AECI Ltd. (AFE), South Africa’s biggest explosives and chemicals maker, agreed to buy a water-treatment unit from Clariant AG (CLN) for 409 million rand ($36.7 million) to expand in the region and tap demand for treating industrial waste water.
AECI will pay cash for the business, which generated about $45 million in sales last year, Muttenz, Switzerland-based Clariant said in a statement today.
AECI will use the deal to build on its ImproChem division, which used the 2012 acquisition of General Electric Co. (GE:US)’s chemical and monitoring solutions business to help build a platform for water-treatment sales in Africa and the Indian Ocean.
“This footprint will be enhanced since ImproChem’s direct sales capability in many African countries will enable it to leverage Clariant’s penetration of these markets,” AECI Chief Executive Officer Mark Dytor said in a separate statement from the Johannesburg-based company today.
AECI is shifting from a reliance on South Africa’s mining industry to focus on higher-margin products including water treatment. The Clariant unit will add both industrial and municipal-water customers.
AECI shares fell 2.3 percent to 126.05 rand as of 10:23 a.m. in Johannesburg, trimming this year gain to 0.8 percent.
The deal includes a 50 percent shareholding in Blendtech, Clariant’s South African black economic partner.
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