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AFE - AECI Limited - AECI acquires water treatment business in Africa

Release Date: 28/06/2012 08:00:01      Code(s): AFE
AFE - AECI Limited - AECI acquires water treatment business in Africa           
AECI LIMITED                                                                    
Incorporated in the Republic of South Africa                                    
(Registration No. 1924/002590/06)                                               
Share code: AFE                                                                 
ISIN No: ZAE000000220                                                           
AECI has entered into an agreement with General Electric ("GE") to acquire      
its world-class Chemical and Monitoring Solutions business in Africa, for a     
total consideration of US$20 million ("the Acquisition").  The Acquisition      
is effective from 1 July 2012 and will be merged into ImproChem, which is       
leading the AECI group`s strategic growth thrust to become the supplier of      
choice for specialty water treatment and process chemicals and services in      
The geographies covered by the Acquisition are Africa (excluding Algeria,       
Egypt, Libya, Morocco and Tunisia) and the Indian Ocean islands of              
Madagascar, Mauritius, Reunion, Rodrigues and the Seychelles. The market in     
these areas is growing strongly.  The Acquisition components outside of         
South Africa are subject to approval by the South African Reserve Bank.         
ImproChem provides integrated water, energy and air solutions to the            
chemical, refining, petrochemical, mining and food and beverage industries.     
It already has a well-established footprint in Africa and the agreement         
with GE will ensure that customers covered by the Acquisition, where water      
is often a scarce resource, continue to have access to the most advanced        
technologies that enhance the efficiencies of their operations while            
reducing operating costs.                                                       
GE had entered into a non-exclusive distribution arrangement with ImproChem     
in October 2011.  In addition to the Acquisition, AECI and GE have now also     
entered into an exclusive distribution agreement and a licensing                
arrangement that provide GE with continued direct involvement with the          
business. As part of the Acquisition agreement, ImproChem will produce          
chemical products using GE formulations at its Umbogintwini plant. GE will      
also have the right to consider forming a joint venture with ImproChem in       
the future.  GE remains committed to the CMS business, as demonstrated by       
its continued investment in CMS research and development and in its CMS         
commercial sales and distribution channels.                                     
Both GE and AECI believe that the new arrangement provides greater              
opportunities than either company could offer alone.  It is well aligned        
with both companies` business models, both have a good reputation in the        
region and a well-regarded compliance culture.  In addition, GE has an          
experienced team of sales people in the field and strong regional               
capabilities that will complement ImproChem`s resources.                        
The Acquisition has been approved by the Competition Commission in South        
Woodmead, Sandton                                                               
28 June 2012                                                                    
Merchant bank and sponsor                                                       
RAND MERCHANT BANK (A division of FirstRand Bank Limited)                       
Date: 28/06/2012 08:00:01 Supplied by www.sharenet.co.za                     
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