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Adani Ports, the transport utility arm of Adani Group, has announced that it entered into a definitive agreement for the acquisition of a 49.38% stake in Indian Oiltanking Limited (IOTL).
IOTL is a joint venture between Germany's Oiltanking GmbH (50%), IOC (25%), and IBP (25%) which was set up in 1996 after three years of negotiations. It is a solution provider with expertise in the domains of Terminalling, Build Services, and Renewable Energy.
Over 26 years, the company has built a large network of 6 terminals with a capacity of 2.4 Mn KL for the storage of crude and petroleum products. Moreover, the company is also on a growth spree to meet the growing demand for these products.
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The all-cash deal also includes the acquisition of a 10% stake in IOT Utkal Energy, a subsidiary in which IOTL holds a 71.57% stake. The acquisition propels Adani Ports and Special Economic Zones (ASPEZ) the largest third-party liquid storage company with a combined capacity of 3.6 Mn KL.
Ernst & Young (EY) has acted as the sell-side M&A advisor for IOTL.
"With this acquisition, APSEZ’s oil storage capacity jumps 200% to 3.6 Mn KL, making it India’s largest third-party liquid storage company. This ties well with our ambition to become the largest transport utility globally. This stake purchase is also well aligned with our strategy of diversifying the cargo mix with focus on products and services having higher realization and margins. The deal will further strengthen our strategic partnership with IOCL, a key stakeholder and India’s largest refiner and customer of oil storage tanks.” said Karan Adani, CEO & WTD at APSEZ.
The stock of Adani Ports currently trades around Rs 880.20 per share, down 1.2%.
Article by Aman Agarwal.
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