Pretoria - Kansai Plascon Africa, a subsidiary of Kansai Paint, has entered into agreements to acquire 100 percent of the operations of Sadolin Paints in Kenya, Tanzania, Zanzibar and Burundi.
The proposed acquisition, which is still subject to regulatory approvals and other conditions, forms part of Kansai Paint’s global expansion strategy.
As part of the transaction, the parties have also agreed to separately investigate the acquisition by Kansai Plascon of Sadolin Paints’ operations in Rwanda.
Kansai Plascon Africa's chief executive, Farid Masood, said the transaction would increase Kansai Plascon’s turnover across Africa by 30percent.
Masood said East Africa was important to Kansai Plascon because of its aim to be number one in the market.
“The size and scale of this transaction offers a great opportunity. We work across four regions - South Africa, central and southern Africa (CSA), East and West Africa,” he said.
Masood said the acquisition further proved Kansai Paint’s long-term commitment to the African continent.
He said the transaction would reinforce the company's leading position in Africa and establish its presence in East Africa, which had a total population of 285 million people representing about 24percent of the total population of Africa and accounted for about 9percent of the continent's gross domestic product.
Masood said the value of the Sadolin Paints transaction was not being disclosed. However, he said Sadolin Paints had an annual turnover of $8 7million (R1.2 billion) and earnings before interest, depreciation and amortisation of $16million.
Masood said Kansai Plascon Africa believed the benefits of the transaction would extend to all stakeholders and Sadolin Paints, including distributors and other business partners. He said Kansai Plascon Africa intended to maintain Sadolin Paints’ market leading position in the East African market by work closely with its management and staff to ensure the continuity of the business and services offered.
Kansai entered the South African market in 2012 through a merger with Freeworld Coatings, the owners of Plascon South Africa.