Hinduja group firm Gulf Oil Corporation on Wednesday said it has acquired US-based Houghton International Inc, a global market leader in metal working fluids, for $1.045 billion (around R5,685 crore) through the company’s UK-based subsidiary.
Gulf Oil’s $1.045 billion acquisition of Houghton is the second biggest acquisition in the year after Indian Hotels, the hospitality arm of the Tata Group, offered to buy Orient Express Hotels for $1.86 billion last month. However, on Tuesday Indian Hotels said that it has still not received any formal reply from Orient Express hotels regarding the Tata Group offer.
Gulf Oil said on Wednesday that “an agreement was signed by its wholly owned subsidiary in the UK on November 6 with the sellers, a US-based private equity fund.” AEA Investors, a New York based private equity fund bought Houghton in 2007.
Houghton, which had total sales of $858 million, has sales in more than 75 countries, supported by 12 manufacturing facilities in 10 countries. Houghton’s revenues are around four times that of Gulf Oil. Gulf Oil said Houghton’s strong industrial portfolio perfectly complements Gulf’s strong presence in automotive lubricants.
The stock price of Gulf Oil at the BSE slumped by 1.43%, or Rs. 1.25, to close at Rs. 86.35. Gulf Oil’s market capitalisation on Wednesday was Rs. 856 crore. Gulf Oil did not state how it would fund the acquisition given its balance sheet size. It is understood the firm may opt for bridge loans. Gulf Oil said it would operate Houghton as a separate company.