Germany-based Brenntag to pick up controlling stake in Raj Petro, form JV

Specialty chemicals distributor Brenntag AG will form a joint venture with Raj Petro Specialities Pvt. Ltd.

Brenntag will buy a 65% in the first tranche which is expected to be closed by April 2018 and the remaining 35% via the second tranche after five years, it said in a statement. The business will be operated as a joint-venture in the five-year interim period, it said.

It did not disclose the deal value.

The joint-venture will help Brenntag expand its India business.

"For Brenntag, the acquisition of Raj Petro is a further step into the Indian chemical distribution market which is the seventh-largest globally for chemicals and third-largest for lubricants. Raj Petro's existing product portfolio and market presence, capability of its infrastructure and strategic locations make it a compelling investment target to expand our footprint not only in India but also in other Asian Pacific countries, in Africa and the Middle East,"said Steven Holland, chief executive officer of Brenntag Group.

Veda Corporate Advisors acted as financial adviser to Raj Petro and its shareholders.

Raj Petro distributes petroleum-related products to diverse industries in India and other countries in Asia Pacific as well as in Africa and the Middle East.

Its portfolio contains own-blended petroleum-related products including transformer oils, white oils and paraffins, petroleum jelly, process oils, waxes and solvents as well as industrial and automotive lubes.

Raj Petro's total income was Rs 1,224.9 crore and net profit was Rs 18.9 crore in the year through 31 March 2016, according VCCEdge, the data research arm of VCCircle.

Founded in 1874, Essen-based Brenntag AG operates as a link between chemical manufacturers and chemical users. The company's net sales were €10.5 billion ($11.6 billion) and net profit was €361 million ($399 million) in the year through December 2016.